FHA Loan Reserves Get Low
ByToday FHA insures 685 billion in mortgage liens. The US Congress mandates that Federal Housing Administration uphold cash reserve requirements which are equal to two percent of this amount. The existing FHA reserves total approximately a half percent which equates to$3.6 billion. The subprime lending crash in 2006 and last year’s government bailouts of mortgage giant’s Fannie Mae and Freddie Mac have polarized the FHA loan program and made the FHA mortgage lending products more vulnerable. Will FHA need a bailout package from Congress?
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