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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 This material may not be published, broadcast, rewritten or redistributed.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 74 312 10,190
MORTGAGES 103 400 13,275
FORECLOSURE NOTICES 0 60 2,598
BUILDING PERMITS 0 562 24,086
BANKRUPTCIES 72 299 9,832
BUSINESS LICENSES 39 110 3,713
UTILITY CONNECTIONS 129 519 14,482
MARRIAGE LICENSES 0 68 3,131

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