FHA bailout, $1.7 billion to stabilize its long term finances, First taxpayer bailout in 79 years, FHA commisioner Carol J. Galante Obama appointee
“What do you think a stimulus is? It’s spending – that’s the whole point! Seriously.”…Barack Obama
“…and Socialist governments traditionally do make a financial mess. They [socialists] always run out of other people’s money. It’s quite a characteristic of them.”…Margaret Thatcher
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From the LA Times September 27, 2013.
“Federal Housing Administration needs $1.7-billion bailout”
“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.”
“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.
A bailout has been expected since April, when the Obama administration’s proposed 2014 budget projected the FHA would need $943 million by Sept. 30.
But the size of the bailout nearly doubled because the number of mortgages the agency has backed declined in the last few months as mortgage rates have risen, Galante said.”
“Many Republicans have been critical of the FHA’s expanded role in the housing market, warning that it put taxpayers on the hook for losses. House Republicans are pushing legislation that would scale back the FHA’s role.”
Carol J. Galante is an Obama appointee.
“The Federal Housing Administration (FHA) of the Department of Housing and Urban Development, which provides a variety of insurance options for qualified loans on existing homes, home construction and repair, and is also responsible for regulation of the Real Estate Settlement Procedures Act and the manufactured housing industry, has been without a permanent leader since April 2011. Carol J. Galante, who currently serves as Acting Assistant Secretary for Housing-FHA Commissioner, was nominated by President Obama on October 20, 2011, to lead the federal agency on a permanent basis. Although the Senate Banking Committee voted to send her nomination to the Senate floor, some conservative Republicans, charging that the Obama administration has not faced the probability of an FHA bailout, may attempt to prevent her confirmation.”