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Report: FHA’s Financial Woes May Be Greater than Prior Estimates

A House panel is investigating what it believes is an attempt by ""Federal Housing Administration"":http://portal.hud.gov/hudportal/HUD (FHA) officials to cover up the full details of the agency's financial troubles regarding its Mutual Mortgage Insurance (MMI) Fund.


The ""House Oversight and Government Reform Committee"":http://oversight.house.gov/ reviewed emails between FHA and IFE Inc., the firm that conducted the agency's actuarial report last year.


While FHA projected a deficit of $16.3 billion (revised to $943 million in the White House budget), the messages reveal that its losses could be as high as $115 billion under the most extreme conditions.

In a letter ""first reported"":http://online.wsj.com/article/SB10001424127887324423904578525550468124078.html on by the _Wall Street Journal_, ""Rep. Darrell Issa"":http://issa.house.gov/ (R-California), head of the committee, asked FHA commissioner Carol Galante why her agency hadn't reported the larger figure. Issa also sent a letter to IFE requesting more information on the report.

According to the _WSJ_, an October email between an IFE analyst and ""a senior FHA official"" showed that while the agency wanted the results of the more extreme scenario, it preferred to keep that analysis out of the report that would be reviewed by media.

In a response to the _WSJ_, HUD spokesperson Addie Whisenant said the agency is reviewing the issue and will ""respond to the committee appropriately."" A lawyer representing IFE asserted the firm was not pushed to change its conclusions or evaluating methods and ""look[s] forward to working with Chairman Issa's staff to share our views with them.""

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.

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