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Less than two years after being confirmed as the head of the Federal Housing Administration (FHA), Commissioner Carol Galante is making plans to step down from her post. In a message sent to her staff Monday morning, Galante revealed that she intends to depart from HUD by the end of this year, after which she will assume a distinguished professorship at the University of California, Berkeley, where she received her master's in city planning.
Galante has been with HUD for five years, starting her career at the department as deputy assistant secretary for multifamily housing. She was nominated by President Obama for the role of FHA commissioner in 2011, receiving her confirmation from the Senate in late 2012, only a month after an audit revealed the agency's mortgage insurance fund had plummeted deep into the red as a result of losses it took following the financial crisis. Despite efforts made to restore the fund, FHA was forced last year to take a $1.7 billion Treasury draw to strengthen its financial position.
A recently released study by TransUnion Corp. found that up to $79 billion in outstanding Home Equity Lines of Credit balances reported at the end of 2013 could be a high risk to default in the next three years. According to the study, 16 million consumers in the U.S. accounted for a total of about $474 billion in HELOC balances as of December 2013. About half of those balances will reach their end of draw period by the end of 2017, at which point those consumers will begin fully amortized payments – and many may not be able to absorb the financial shock, forcing them into default.
by Brian Honea
