Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

FHA Will Boost Premiums, Sell Mortgages to Improve Finances

Don't Miss Out —
Follow us on:

Nov. 16 (Bloomberg) -- The Federal Housing Administration will raise annual premiums by 10 basis points, sell 10,000 delinquent loans per quarter and boost relief for borrowers as part of a plan to improve the agency’s finances, U.S. Housing and Urban Development Secretary Shaun Donovan said today.

Donovan spoke at a briefing in Washington a day after the FHA reported a $16.3 billion deficit in its insurance fund due to defaults on loans it insured during the housing bubble.

“This set of measures will reduce the likelihood that FHA will need to tap into Treasury assistance next September,” Donovan said.

The FHA, which currently backs 15 percent of U.S. mortgages, provides liquidity to the housing market by insuring lenders against losses on loans with down payments as low as 3.5 percent. The premium increase outlined today is for the annual fee charged to borrowers to guarantee their lender will be made whole in the event of a default.

To contact the reporter on this story: Clea Benson in Washington at cbenson20@bloomberg.net

To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.