Step aside, Fannie and Freddie.
The FHA—which is accountable for more than $1.3 trillion of home loans in the U.S.—suffered staggering losses on loans insured prior to the housing market crash, according to the U.S. Dept. of Housing and Urban Development’s report.
In a few years, the agency could be $26 billion in the red and isn’t expected to start building itself back up again until at least 2012, the report said.
To paint a rosier picture, HUD applauded steps taken by the government to support the FHA.
If all goes well in the housing market leading into the next year, the agency could see rapid gains in profit as soon as 2014, it said.
But that’s a big IF.
Don’t forget that consumers have already paid $160 billion to bail out another pair of government-sponsored lenders: Fannie Mae and Freddie Mac.
And if the FHA wants more pennies for its piggy bank, it’s going to have to step in line.
Fannie Mae is already asking for a $7.8 billion loan to cover its losses in the last year and chances are Freddie won’t be far behind.
Read the full report online here.
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