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VOL. 128 | NO. 109 | Wednesday, June 05, 2013

FHA Reverse Mortgage Losses May Require Bailout

ANDREW MIGA | Associated Press

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WASHINGTON (AP) – The head of the Federal Housing Administration says her agency may need as much as a $1 billion rescue package to bolster its reserves despite efforts to shore up its finances with higher mortgage insurance premiums.

FHA Commissioner Carol Galante told a Senate committee on Tuesday that her agency, which insures some 40 million home mortgages, is struggling with more than $5 billion in losses on reverse mortgages this year. Galante says the FHA played a crucial role in bringing the housing market back from the brink of collapse, but at a heavy financial price to itself.

The FHA is required by law to maintain reserves equal to 2 percent of the total amount of home mortgages it insures. It currently has about $32 billion in reserves.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 67 67 10,289
MORTGAGES 107 107 13,434
FORECLOSURE NOTICES 24 24 2,668
BUILDING PERMITS 393 393 24,700
BANKRUPTCIES 60 60 9,952
BUSINESS LICENSES 16 16 3,752
UTILITY CONNECTIONS 149 149 14,706
MARRIAGE LICENSES 31 31 3,198

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