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WASHINGTON -- The Federal Housing Administration, which has played a crucial role in stabilizing the housing market, said it ended September with $16.3 billion in projected losses -- a possible prelude to a taxpayer bailout.
The precarious financial situation could force the FHA, which has been self-funded through mortgage insurance premiums since it was created during the Great Depression, to tap the U.S. Treasury to stay afloat.
The agency said a determination on whether it needs a bailout won't come until next year.
The FHA is required to maintain enough cash reserves to cover losses on the mortgages it insures. But in its annual actuarial report to Congress, the agency said a slower-than-anticipated housing market recovery has led its reserves to fall $16.3 billion below anticipated losses................
FHA projected to exhaust reserves, could need bailout