FHA Fund Sustains Losses: The New York...

FHA Fund Sustains Losses: The New York Times reported in today’s editions that the main Federal Housing Administration fund that insures $275 billion worth of mortgages is sustaining losses that could drain its reserves and add billions to the federal budget deficit, according to government investigators and private auditors. The first audit of the 55-year-old FHA, due to be published in the next several weeks, is expected to show a second consecutive annual loss at the fund. Agency officials said reserves to reimburse lenders on defaulted mortgages had dwindled to $2.8 billion, enough to cover up to five months of claims. If the fund defaults, the Treasury Department would be liable for claims.