TribLIVE

| USWorld


 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

Loan losses lead to FHA budget crisis

Email Newsletters

Click here to sign up for one of our email newsletters.

Daily Photo Galleries

By Reuters
Wednesday, Sept. 25, 2013, 6:51 p.m.
 

WASHINGTON — The Federal Housing Administration, weighed down by losses on souring loans, likely will need a cash infusion from the Treasury for the first time in its nearly 80-year history when the budget year ends, according to sources familiar with the matter.

The agency, which offers private mortgage lenders guarantees against homeowner default, has nearly exhausted its reserves for the mortgages it backs, making it necessary for the government agency to turn to the Treasury Department for a cash injection.

The FHA has never needed to tap the Treasury before because it has been able to take other actions, including raising insurance premiums, to stay solvent. The government mortgage insurer plays a key role in helping those with low and modest incomes obtain access to credit to purchase a home.

The White House projected in April that the FHA would face a shortfall of $943 million for the fiscal year that ends on Monday, but the agency said it would wait until the end of the budget year to make a final decision on whether to draw Treasury aid.

Subscribe today! Click here for our subscription offers.

 

 


Show commenting policy

Most-Read Nation

  1. Ex-convict arraigned in New York City police officer’s shooting
  2. Lessons sought from 2001 Cincinnati riots over 15 slayings
  3. Researchers find new, elusive bird species
  4. Ex-NFL star Plaxico Burress accused of failing to pay taxes
  5. Expert: U.S. about to become net exporter of energy
  6. Prosecutor charges 6 Baltimore officers in Gray’s death
  7. Ousted Secret Service agent Smith remains on payroll, House committee learns
  8. Rift invites talk of Florida split
  9. White House mum on hack of computer system by Russia last fall
  10. Supreme Court leans toward legalizing gay marriage nationally
  11. At New York City rally, United States urged to acknowledge slaughter of Armenians as genocide