[Beagle8U]

“Anyone have any idea why this was done?”

Yeah, it’s because a whole bunch of them shouldn’t ever been given a loan to start with, and will likely default.

[HotHunt]

PMI is Private Mortgage Insurance on conventional loans (not FHA or VA loans) where the borrower's equity is less than a 20%. The insurance is to insure against default by high risk borrowers who don't have enough "skin" in the game when they buy a house and borrow the money.

Reducing the PMI payment, like Obama did, makes the risk even higher. Trump is just acknowledging that there is a good reason why some loans have PMI added on to the payment. It is to reduce the risk to the lender. If the premium is cut, the risk goes up.

This is a good thing. If people want to borrow $300,000 to buy a house and don't have 20% of the sales price for a down payment, they need the PMI to even get the loan. Reducing the premium amount may help the borrower, but it also puts the lender at a higher risk of that borrower defaulting.