By Nick Timiraos | The Wall Street Journal
The Federal Housing Administration ran a projected shortfall of $1.3 billion at the end of September, down from a much larger projected deficit of $16.3 billion one year earlier, according to the agency’s independent financial review, released Friday.
The annual actuarial review is a study of the agency’s net worth. It makes certain assumptions about how loans guaranteed by the agency will perform given the broader economic environment, and then uses those projections to determine how much money the FHA could lose covering potential defaults.
The report shows that rising home prices, improving loan performance and repeated loan-fee increases are helping to curb losses at the agency.
