President Trump signs an executive order. (Evan Vucci / AP)

During his first hour in office, the president who vowed to protect working-class Americans ordered the U.S. government to end its policy of helping millions of home buyers cover the cost of their mortgages.

The Federal Housing Administration insures more than $1.1 trillion worth of mortgages on more than 7 million loans.

Consumer Affairs founding editor James R. Hood reports:

Democrats and consumer advocates denounced the move. “In one of his first acts as president, President Trump made it harder for Americans to afford a mortgage,” Senate Minority Leader Charles Schumer (D-N.Y.) said in a statement. “What a terrible thing to do to homeowners.”

The Obama measure would have reduced the premium on Federal Housing Administration-backed loans by 0.25 percent. That would have saved someone buying a $200,000 home about $29 a month.

The FHA insures about 16 percent of new mortgages in the U.S. under a long-standing program to make home ownership more affordable for middle-class consumers.

First-time homebuyers who might have trouble qualifying for a private mortgage can often get an FHA-insured loan because taxpayers are guaranteeing the loan. This adds a monthly insurance premium to the loan payment but often enables the homebuyer to qualify for a mortgage they might not be able to get otherwise. …

There wasn’t much in the way of an explanation for Trump’s action, although Republicans had called the 0.25 percent reduction “hasty” and said that while it might help consumers, it threatened the stability of the FHA.

Read more here.

—Posted by Alexander Reed Kelly

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