Mixed views on FHA financial strength

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FHA News Editor - Here we post articles each week on FHA/VA Government news.

Some housing commentators warn that the Federal Housing Administration is depleting its cash reserves due to a spike in delinquencies on older FHA-insured loans, and the agency may soon be calling on taxpayers for help, CNNMoney reports. But other commentators say home price trends are important to FHA’s reserve fund strength, and the federal housing secretary says FHA’s reserves are up from last year. The percentage of FHA loans with three or more missed payments increased 9.3 percent in November. FHA’s reserve funds depleted to 0.24 percent in 2011, which is below the two percent level it is mandated to maintain by Congress. The FHA insures lenders against defaults; it does not issue mortgages.

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