Federal Housing Administration (FHA) Commissioner Carol Galante, telling the House Financial Services Committee her agency will not likely need Treasury assistance this year, says the FHA has raised its insurance premiums five times since 2009, is raising them again April 1, and is issuing new regulations to reduce losses. The Government Accountability Office (GAO) has the FHA in its sights of “high risk” government programs, and House Financial Services Committee chairman Jeb Hensarling, R-Texas, says FHA’s designation as a high risk is not surprising. “We know the FHA is broke and is quickly approaching bailout-broke.” There are 734,650 seriously delinquent loans in its portfolio, and independent auditors estimate FHA will have to absorb $60 billion in claims by the end of FY 2014, most of which are on loans originated in those underwater days of FY 2007 through FY 2009. However, refinancings fourth quarter year-over-year doubled, totaling $32.7 billion in Q4 compared to $15.4 billion in the same quarter of 2011. FHA is refinancing 50,000 current FHA borrowers a month; and the Congressional Budget Office (CBO) says after updating its estimates, FHA took in $4 billion more than originally estimated. As nationalmortgagenews tells MHProNews, mortgage consultant Brian Chappelle says, “FHA is endorsing the best loans in its history.”
