Detroit's $300M bailout a distraction; FHA also gets $1.7B bailout todaySubmitted by SteveMT on Fri, 09/27/2013 - 11:19
[$2B will be magically created out of thin today. Why doesn't that feel good?]
FHA to Draw $1.7b From Treasury to Cover Losses
WASHINGTON September 27, 2013
A federal housing agency said Friday it needs a $1.7 billion bailout from the Treasury to cover projected losses in a mortgage programs for seniors.
At issue are reverse mortgage programs, which allow seniors to borrow against their homes for everyday living expenses.
Federal Housing Administration Commissioner Carole Galante told Congress in a letter that her agency will withdraw the money from the Treasury before the fiscal year ends Monday. Congressional approval is not required. The cash infusion is the first in the agency's 79-year history.
The cash infusion from the Treasury is about twice as much as the Obama administration projected would be needed in April. Obama's fiscal 2014 budget request said the FHA would probably need $942 million.