Senate confirms FHA chief
WASHINGTON — Senators voted on Sunday to confirm the leader of the Federal Housing Administration, an agency that may need an infusion of taxpayer money next year for the first time in its history.
Carol Galante, the FHA's acting commissioner since mid-2011, was approved by the Senate on a 69-24 vote.
The FHA, a key source of mortgage funding for first-time home buyers and those with modest incomes, backs $1.1 trillion in home mortgages. Last month, it reported a projected shortfall of $16.3 billion because of souring loans that it insured during the housing market downturn.
Some Republicans argued she hasn't done enough to stem losses.
Galante “has denied the true severity of the problems at the FHA,” said Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee.
An independent audit suggested that the FHA would require taxpayer funding for the first time in its 78 years, though that won't be decided until February when the Obama administration releases its next budget.
In response to the shortfall, the agency raised the premiums it charges on guaranteed loans by one-tenth of a percentage point, adding, on average, about $13 to a borrower's monthly mortgage payment.
Sen. Tim Johnson, the Democrat who heads the Banking Committee, said Galante was well qualified and attributed the FHA's problems to legacy loans that were threatening the agency's finances.