FHA reverse mortgage losses may require bailout

The AP reports:

The Federal Housing Administration may need as much as a $1 billion rescue package before the end of the year to bolster its reserves despite efforts to shore up its finances with higher mortgage insurance premiums, a Senate subcommittee was told Tuesday. FHA Commissioner Carol Galante said her agency, which insures some 40 million home mortgages, is struggling with more than $5 billion in losses on reverse mortgages that allow people over 62 to borrow against their home equity and use the money for living expenses. Galante said the FHA played a crucial role in bringing the housing market back from the brink of collapse, but at a heavy financial price to itself.

Great moments of socialism.