Will the Federal Housing Administration need another "Bailout" in 2012?

April 4, 2012
By David Goldman on April 4, 2012 8:27 AM |

Jacksonville Foreclosure Defense TeamNot this fiscal year according to Acting Federal Housing Commissioner Carol Galante. Recently, a Moody's Analytics report investigated the rumor that the Federal Housing Administration (FHA) may need a taxpayer bailout in 2012. Besides bringing back thoughts of 2008, the report also directly got the attention of the FHA. The Administration responded to the reports itself, releasing a myth and fact sheet that called the bailout news "speculative." The sheet attempts to put to rest many myths about the FHA, from "FHA will need a 'bailout'" to "FHA uses lax accounting standards."

As far as a bailout goes, the FHA responded by saying: "Sweeping changes enacted by FHA since 2009, including an important series of recent steps such as the enforcement actions that resulted in over $900 million in compensation to FHA from settlement agreements with major banks, and further increases to FHA's insurance premiums, it is unlikely that FHA would require additional resources from the U.S. Treasury in 2012." That section does go on to clarify that the Administration would need such a bailout if losses on the most stressed business books increased substantially. This would only happen, in the FHA's eyes, if home prices continue to decline on a national level for a sustained period of time.

During uncertain times such as this recent recession, there is bound to be a lot of misinformation flying around. Because of that, it is best to do your due diligence and research thoroughly any questions you may have. Perhaps the greatest resource available to any one facing Foreclosure is the assistance of a Jacksonville Foreclosure Defense Attorney through each step of the process.