House OKs plan for higher gov't mortgage fees

June 11, 2010 8:46:45 AM PDT
WASHINGTON (AP) - Higher monthly fees may be in the works for consumers who take out home loans guaranteed by the Federal Housing Administration, the primary source of mortgages for first-time homebuyers. The House has approved a bill giving the FHA power to hike monthly premiums it charges to consumers. The vote was 406-4. Officials say the agency needs to do so to stabilize its finances, which have deteriorated because of the foreclosure crisis. The agency does not make loans, but offers insurance against default. Borrowers pay extra fees because FHA-backed loans require down payments of only 3.5 percent of the purchase price. Under changes being considered by FHA, a borrower with a mortgage of $170,000 would pay an extra $42 a month.