WASHINGTON -- A federal housing agency says it needs a $1.7 billion bailout from the Treasury to cover projected losses in a mortgage programs for seniors. At issue are reverse mortgage programs, which allow seniors to borrow against their homes for everyday living expenses.
Carol Galante is Federal Housing Administration Commissioner. Galante wrote Congress Friday that her agency will withdraw the money from the Treasury before the fiscal year ends Monday. Congressional approval is not required. The agency insures mortgages for millions of homeowners. It's struggling with $5 billion in losses on its reverse mortgage program.
The FHA suffered big losses when many borrowers 62 or older took large payments up front and later ran into financial problems, often due to falling home values during the financial crisis.