FHA says it won’t need another bailout

The Federal Housing Administration, the largest insurer of low down payment mortgages, says it will not need taxpayers to bail it out again this year.

On Tuesday, the U.S. Department of Housing and Urban Development projected that the FHA’s capital reserve fund will end the year with a positive balance of $7.8 billion.

Last year, FHA required a $1.7 billion infusion from the Treasury Department to build up its depleted capital reserves to the level mandated by Congress — 2% of its $1.17 trillion in loan balances. It was the first time in the agency’s 80-year history that it required such a bailout.

FHA’s loan portfolio took a beating during the housing bust. It was nearly the only agency to back loans for those who had little money saved for a down payment. At one point, FHA insured more than 25% of all loans, up from the low single digits during the boom years.

To help restore its reserves, the agency has raised its insurance premiums and now requires borrowers to keep paying the premium for the entire life of the loan.

There have also been fewer defaults, requiring the agency to make fewer insurance payouts. By the end of 2013, the delinquency rate for FHA loans was 10.47%, nearly four percentage points lower than the high of 14.36% seen in mid-2009.

The housing market’s recovery has also helped push home prices higher, which is helping the agency reduce its losses when a home is foreclosed on and sold in auction. FHA said lenders have also been better at working with delinquent borrowers to help them prevent foreclosure. 

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About thenoelteam

As a Broker with RE/MAX Alliance, I work energetically for my clients whether they are a buyer or seller. I help you achieve your goal of owning a home or getting the best price for your home in the shortest time possible. After graduating from UCLA with a degree in communications and finance, I was licensed in 1977 and since then I have sold over 3600 properties amounting to over $1 billion in sales. I currently rank in the top 10 in home sales for Colorado. I offer the same quality of service and superior communication to all clients, ranging from starter homes to multi-million dollar estates, commercial and income properties, relocations and foreclosures My goal is to provide you with the best representation possible whether you are buying or selling. Over the years, one of the things that I've discovered is that there is a difference in the way individual Realtors do business. For me, I have always felt that honesty and personal integrity are the foundations upon which a successful business and career are built and sustained. I have an extensive background and knowledge base in real estate, including financing, which has enabled me to provide outstanding, quality advice and service not found with many agents today. My commitment to communication creates a positive relationship between my client and myself that results in a successful property sale or purchase. My passion for real estate, commitment to my clients and personal integrity has helped me to achieve success placing me in the top 1% of all brokers in nationwide. In my career, I have earned a number of awards and received considerable recognition for my success but the most significant recognition comes from the fact that over 75% of my business comes from past clients. My success is a true measure of my client satisfaction.
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