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Home » Store » News » HUD Needs to Improve Forecasting in Wake Of $7 Billion Re-Estimate of FHA Credit Subsidy

HUD Needs to Improve Forecasting in Wake Of $7 Billion Re-Estimate of FHA Credit Subsidy

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The Department of Housing and Urban Development significantly underestimated actual claims and prepayment rates on most cohorts of FHA-insured single-family mortgages, according to a new report from the Government Accountability Office. At the end of fiscal 2003, HUD was forced to raise its estimate of the “credit subsidy” incurred by the FHA mortgage insurance program by a hefty $7 billion – more than double the size of any previous adjustment in the program’s estimated cost.… [One data table included}
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