FRESNO, Calif. (KFSN) --The policy the Trump administration blocked with an executive order would have reduced the cost of mortgages for millions of home buyers starting this Friday, but one local loan officer says the rate cut was a politically motivated move and Trump made the right decision.
It only took one hour into his presidency for Donald Trump to axe an Obama administration policy. Trump's first executive action was to block the reduction of FHA-backed mortgage rates.
"President Trump made it harder for average Americans to afford a mortgage," Sen. Chuck Schumer said.
Schumer was outspoken this week about the President's decision. The mortgage premium cuts would have lowered FHA-backed loans by 0.25 percent. Schumer says now average American families are missing out roughly $500 in savings a year.
"These are young families just starting out they want part of the American dream, a home," he said. "And there is no need to raise their mortgage rates."
But local loan officer Paul Salazar says it's not necessarily a bad move. He says that's dangerous because first-time buyers who can't afford to purchase a home end up getting approved.
"If they lower the mortgage insurance then the monthly payment is a little bit lower and that means people can afford a little more house," Paul Salazar with Sierra Pacific Mortgage explained.
He compared the rates to the last time the housing market crashed causing a total collapse of the economy. Shannon Larose of Clovis is a first-time home buyer and found a house close to her mother. She says they made sure they could afford the property before taking the plunge to purchase a home.
"The loan officer that we worked with, she basically said this is the highest it could go and this is the lowest it could go," she said. "So, we kind of kept that in mind when making a decision."
At this point, it's unclear if the Trump administration will decide to unblock that policy after review or change the FHA backed mortgage rates for first time home buyers.
Since that policy would have reduced rates starting this Friday, Salazar says no one will see a jump in their monthly payments since nothing was in effect yet.