FHA RESERVES DROP BELOW ZERO: IS A BAILOUT ON THE HORIZON?

  • Logo of the Federal Housing Administration.
    Logo of the Federal Housing Administration. (Photo credit: Wikipedia)

    The Federal Housing Administration (FHA) reports its reserve fund is at -l.44%, down from 0.34% in 2011.  FHA will need a bailout for the first time in its history if its reserves are still negative in Novemeber 2013.

The FHA isn’t taking this lying down.  Measures to take the FHA back into the balck include:

  • extending premium payments for new loan
  • increasing annual insurance premiums on new loans by 0.1%

It also plans to increase foreclosure efficiency and avoid costly foreclosures by:

  • continuing to sell pools of defaulted mortgages to investors
  • allowing deeper levels of payment relief for distressed homeowners
  • allowing more short sales.
Enhanced by Zemanta