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By Jim Puzzanghera This article has been corrected. See the note below for details.
September 27, 2013, 9:51 a.m.
WASHINGTON -- The Federal Housing Administration, whose role in the real estate market expanded dramatically in recent years, on Friday said it would need approximately $1.7 billion to stabilize its long-term finances.
It marks the first time the 79-year-old agency will require a taxpayer bailout, which it has the authorization to receive without congressional approval.
The FHA, which insures more than $1 trillion in mortgages, is funded by premiums charged to homeowners. But the actions it took to stabilize the housing market after the subprime housing bubble burst left it backing billions of dollars in bad loans.
The agency has been working to improve its finances by tightening underwriting standards even as it continues to try to assist the housing market by insuring mortgages with down-payments as low as 3.5% and easing rules for foreclosed borrowers.
In a letter to lawmakers Friday, FHA Commissioner Carol Galante said the agency would need about $1.7 billion on Monday, the last day of the fiscal year, to ensure it has sufficient reserves to cover anticipated losses on the loans it backs.
Federal Housing Administration needs $1.7-billion bailout - latimes.com
September 27, 2013, 9:51 a.m.
WASHINGTON -- The Federal Housing Administration, whose role in the real estate market expanded dramatically in recent years, on Friday said it would need approximately $1.7 billion to stabilize its long-term finances.
It marks the first time the 79-year-old agency will require a taxpayer bailout, which it has the authorization to receive without congressional approval.
The FHA, which insures more than $1 trillion in mortgages, is funded by premiums charged to homeowners. But the actions it took to stabilize the housing market after the subprime housing bubble burst left it backing billions of dollars in bad loans.
The agency has been working to improve its finances by tightening underwriting standards even as it continues to try to assist the housing market by insuring mortgages with down-payments as low as 3.5% and easing rules for foreclosed borrowers.
In a letter to lawmakers Friday, FHA Commissioner Carol Galante said the agency would need about $1.7 billion on Monday, the last day of the fiscal year, to ensure it has sufficient reserves to cover anticipated losses on the loans it backs.
Federal Housing Administration needs $1.7-billion bailout - latimes.com
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