US FHA’s losses to swamp capital, audit finds

The US Federal Housing Administration’s capital is inadequate to cover expected losses, which would push it into a deficit of US$13.5 billion, an independent audit has found, according to a US housing official.

The findings likely mean the agency, which insures about one-third of all US mortgages, will need taxpayer funding for the first time in its 78-year history. It also appears certain to fuel a long-standing debate on the government’s role in supporting the housing market.

The findings, first reported by the Wall Street Journal, are due to be released on Friday.

via Business feed http://www.scmp.com/business/banking-finance/article/1083768/us-fhas-losses-swamp-capital-audit-finds