The Federal Housing Administration’s projected losses over 30 years could hit $115 billion, according to a Congressional committee’s Documents Reported By The Wall Street Journal.
The forecast is significantly more negative than an independent actuarial review of the agency released in November. Maryland-based Integrated Financial Engineering, which conducted the actuarial review, had projected a shortfall of $65.4 billion, or a “protracted” economic “slump.” The $115 billion figure was determined from an undisclosed stress test last year but Integrated Financial Engineering analysts omitted the figure when the FHA’s report was being finalized in October.
“In Congressional hearings, it is quite possible that we will be required to present this information on-the-record, but that will be well after the actuarial review is released and the initial media coverage takes place,” a senior FHA official wrote in an email to an analyst, as reported by the Journal.
The budget office did an analysis in April that showed FHA would need $943 million this year due to losses in its reverse-mortgage program. The program allowed homeowners 62 and up to take cash out of their homes, the newspaper said.
The FHA is the largest source of low down-payment mortgage money in the country. [WSJ] –Mark Maurer