Audit shows US housing agency faces $16.3B losses - WOWK 13 Charleston, Huntington WV News, Weather, Sports

Audit shows US housing agency faces $16.3B losses

Posted: Updated:
  • BusinessBusinessMore>>

  • Jam-band magazine celebrates 2-year anniversary

    Jam-band magazine celebrates 2-year anniversary

    Sunday, April 20 2014 4:00 PM EDT2014-04-20 20:00:13 GMT
    Appalachian Jamwich, a Shepherdstown-based magazine dedicated to jam-band music, art and culture in West Virginia and the surrounding region, is celebrating its two-year anniversary this month.
    Appalachian Jamwich, a Shepherdstown-based print and online magazine dedicated to jam-band music, art and culture in West Virginia and the surrounding region, is celebrating its two-year anniversary this month.
  • City-wide scavenger hunt in Wheeling

    City-wide scavenger hunt in Wheeling

    Sunday, April 20 2014 2:00 PM EDT2014-04-20 18:00:09 GMT
    A new fundraising event in the Upper Ohio Valley to raise funds for Youth Services System is in the works for June 21 in downtown Wheeling.
    A new fundraising event in the Upper Ohio Valley to raise funds for Youth Services System is in the works for June 21 in downtown Wheeling.
  • Barboursville plans to grow its recreation opportunities

    Barboursville plans to grow its recreation opportunities

    Sunday, April 20 2014 1:00 PM EDT2014-04-20 17:00:13 GMT
    Commercial growth in Barboursville has allowed for improved services, and now village officials plan to build on the village's role in recreational opportunities in the region.
    Commercial growth in Barboursville has allowed for improved services, and now village officials plan to build on the village's role in recreational opportunities in the region.

WASHINGTON (AP) — A federal agency that insures mortgages for millions of low- and middle-income borrowers is facing losses of $16.3 billion and may require taxpayer support, according to an independent audit released Friday.

The Federal Housing Administration's estimated losses were steeper than earlier projections. That shows high numbers of mortgage defaults triggered by the housing crisis have reduced the FHA's reserve funds.

The Department of Housing and Urban Development, which oversees the FHA, stressed the agency has sufficient cash to pay insurance claims against mortgage defaults.

Still, HUD said the Obama administration will consider seeking taxpayer assistance for the agency. That will be decided early next year when the administration puts together its budget request for fiscal 2014.

The FHA has taken steps to shore up its reserves over the next few years, HUD said in a news release accompanying the audit. Among them: Expanding so-called short sales — when a home sells for less than what is owed on the mortgage — and raising annual insurance premiums paid by FHA borrowers by an average of $13 a month.

Lower mortgages rates contributed the FHA's bleaker financial situation, HUD said. When people refinances at lower rates, it reduced revenue earned from loans.

The FHA insures about $1 trillion in home loans. The FHA and government-controlled Fannie Mae and Freddie Mac together back around 90 percent of new mortgages. Fannie and Freddie were bailed out by the government in 2008 during the financial crisis and have cost taxpayers about $170 billion,

Sen. Tim Johnson, chairman of the Senate Banking Committee, said he was "deeply concerned" by the audit. The South Dakota Democrat said he will ask HUD Secretary Shaun Donovan at a hearing about what actions are needed to shore up the FHA's finances.

 

Copyright 2012 The Associated Press.