According to an article in the Star-Telegram, the Federal Housing Administration (FHA) has been terribly weakened by the foreclosure crisis and many analysts fear that the housing agency may need a taxpayer bailout.
The article said:
“On Friday, the FHA said its financial reserves had sunk below mandatory levels for the first time in its 75-year history. While officials insist the agency won’t require a taxpayer rescue, falling home prices, rising unemployment and shady lenders continue to drive up default rates.”
Nationwide, the number of FHA borrowers facing foreclosure has risen to 17 percent and the agency is currently trying to sell 40,000 properties that have succumbed to foreclosure. A month ago, the Obama administration launched a foreclosure prevention program specifically targeting FHA borrowers; but the program will only help 45,000 of the 850,000 FHA borrowers facing foreclosure. Under the program some FHA borrowers facing foreclosure would receive loan modifications; but with the high rate of unemployment and wage cuts many of those homeowners may not be able to make any payments.
Loan modifications work best for those who have steady income. Homeowners who are unemployed are unlikely to maintain payments under a loan modification because their lack of income makes it nearly impossible. But for those homeowners who borrowed under the FHA program and still have income, you can find out more information about the loan modification program by calling 888-297-8685. The FHA’s hot line is available weekdays from 7 a.m. to 7 p.m. CST.