
I have heard from two sources that private mortgage insurance is the new topic of discussion at the Capital. The House of Representatives passed a revision on the rates for MIP to bolster FHA's wobbly finances by a potential of 150%, however most of the experts are guessing it will double to .90 of the base loan amount.
Mortgage insurance is insurance for the lender. It protects the lender from losses and costs resulting from foreclosure. It is based on the fact that the less personal investment of the buyer, the greater the risk for the lender.
This will impact every buyer looking for financing where they have less than 20% of purchase price. The Senate will be getting the bill in the near future. Based on the overwhelming pass at the house (404-4), I would think the Senate will pass the bill.
With increased costs on the loan, the price could be offset by the interest rate on the loan, but that is not expected.