Housing Agency's Reserves at Risk

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

The Federal Housing Administration will exhaust its reserves over the coming year, according to budget projections released Monday, which would require a Treasury infusion for the first time in its 78-year history. But Obama administration officials said more recent developments, including fines that will go to the FHA from last week's $25 billion mortgage settlement with five major banks, could cover any shortfall and obviate the need for taxpayer funding. The FHA has burned through its reserves over the past three years as defaults mount on loans it guaranteed as housing markets deteriorated.

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SOURCE: Published by NAMP® Publishing Group, a division of the National Association of Mortgage Processors (NAMP) (http://www.mortgageprocessor.org)