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. Family of woman found dead in Texas jail files wrongful death suit
  2. GOP hopefuls take on illegal immigration in debate preview
  3. Milwaukee archdiocese wants to pay 300 abuse victims $21M; it’s not enough, some say
  4. Manhunt under way for suspect in Memphis officer’s killing
  5. Veterans notified of info breach in South Dakota
  6. Obama orders steeper emission cuts from power plants
  7. Hurricane Guillermo downgraded to tropical storm
  8. Medicare patients’ outcomes improve
  9. 2 women advance to final phase of Army Ranger training
  10. West Virginia on pace to issue record number of concealed-carry permits