Federal Housing Administration (FHA) Reverse Mortgage Losses May Require Bailout

The FHA may need as much as a $1 billion rescue package before the end of the year to bolster its reserves despite efforts to shore up its finances with higher mortgage insurance premiums. FHA Commissioner Carol Galante said her agency, which insures some 40 million home mortgages, is struggling with more than $5 billion in losses on reverse mortgages that allow people over 62 to borrow against their home equity and use the money for living expenses. Galante said the FHA played a crucial role in bringing the housing market back from the brink of collapse, but at a…

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