Loan losses lead to FHA budget crisis
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.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Family of woman found dead in Texas jail files wrongful death suit
- GOP hopefuls take on illegal immigration in debate preview
- Milwaukee archdiocese wants to pay 300 abuse victims $21M; it’s not enough, some say
- Manhunt under way for suspect in Memphis officer’s killing
- Veterans notified of info breach in South Dakota
- Obama orders steeper emission cuts from power plants
- Hurricane Guillermo downgraded to tropical storm
- Medicare patients’ outcomes improve
- 2 women advance to final phase of Army Ranger training
- West Virginia on pace to issue record number of concealed-carry permits