Trump's mortgage executive order targets mortgage insurance and refinance costs: what it does and doesn't do

President Donald Trump on Thursday, Oct. 22, signed an executive order titled “Decreasing Housing Costs for the American People,” aimed at lowering the cost of mortgages and single-family homeownership. The order goes after two specific expenses, mortgage insurance and refinance closing costs, but much of its effect will depend on how federal housing regulators put it into practice.

The order lands less than two weeks before the Nov. 3 midterm elections, with housing affordability a major concern for voters, CNBC noted. As of Oct. 23, the average 30-year fixed mortgage rate stood at 7.32%, according to Freddie Mac data cited by CNBC.

What does Trump’s mortgage executive order do?

According to the White House fact sheet, the order:

• Mortgage insurance: directs the Federal Housing Finance Agency (FHFA) to create a pilot program that proactively cancels borrowers’ mortgage insurance once they meet equity requirements based on their home’s current market value.
• Title insurance: directs the FHFA to turn its title insurance waiver pilot into a permanent program, letting more borrowers use cheaper alternatives to a lender’s title policy when they refinance.
• Manufactured housing: creates a Task Force on Manufactured Housing Innovation, co-chaired by the HUD secretary and the FHFA director, to encourage factory-built homes eligible for federal programs.
• USDA and VA loans: directs the secretaries of Agriculture and Veterans Affairs to reduce interest rates on single-family home loans made by their departments.

FHFA Director Bill Pulte wrote on X that “millions of Americans will save thousands and thousands of dollars,” CNBC reported.

Will it lower refinance costs?

Possibly, for some borrowers, though the details are still to come.

HousingWire reported that the order calls for waiving appraisals, income re-verification and other paperwork on certain limited cash-out refinances that lower a borrower’s monthly payment, and for reducing or eliminating loan-level price adjustments and other fees on those loans. It also contemplates expanding the title pilot to loans above 80% loan-to-value, removing geographic limits and certifying more title assessment providers.

The savings figures in circulation vary by source and program:

These are estimates from different parties, not guaranteed savings, and the final rules have not been written.

What changes for mortgage insurance?

Conventional borrowers who put down less than 20% typically pay private mortgage insurance, which Fannie Mae says can cost 0.2% to 2% of the loan per year, CNBC reported. Under current rules, borrowers can generally ask to drop it at 80% of the original value, and it is removed automatically at 78%.

There is an important limit. HousingWire reported that a draft of the order would have applied the pilot to all loans bought by Fannie Mae and Freddie Mac, but the signed version covers only “mortgages made after the establishment of the pilot program.” CNBC likewise said it would apply to new mortgages after the pilot launches. That means current homeowners are unlikely to benefit from this piece directly.

How has the industry reacted?

Reaction has been mixed, HousingWire reported.

• Analysts at Keefe, Bruyette & Woods called the order “fairly benign for both mortgage and title insurers.”
• Seth Appleton of U.S. Mortgage Insurers said private mortgage insurance “is designed to be temporary” and that the system “already works much the way the order envisions.”
• Chris Morton, CEO of the American Land Title Association, warned that cost cutting should not “shift significant financial risks onto American families,” pointing to rising title fraud.
• Some industry advisers argued the order addresses the “plumbing” of housing finance while high rates remain the bigger obstacle.

Keith Gumbinger of mortgage site HSH told CNBC it is hard to know the consumer impact without more details, but added, “every little bit certainly helps.”

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