Comments from Liberty Blitzkrieg on a recent Wall Street Journal Article.
The FHA is Blowing Up: Bad News for the Housing Market
A very important article came out from the Wall Street Journal yesterday titled “FHA Nears Need for Taxpayer Funds,” and it outlines the serious financial problems facing the Federal Housing Administration. For those that are unaware or need a refresher, the FHA has been the key element to the phony “housing recovery” the government has been trying to create. In the wake of the collapse of 2008, Fannie Mae and Freddie Mac blew up and what was left to pick up the pieces was the FHA. No private player would issue loans with down payments of 3%, but this was no problem for the FHA!
Interestingly enough, a lot of the subprime borrowers that blew up the housing market the last time became the primary customers of the FHA. Let’s see, 3% down and subprime borrowers…what could possibly go wrong?! From the WSJ:
The Federal Housing Administration is expected to report this week it could exhaust its reserves because of rising mortgage delinquencies, according to people familiar with the agency’s finances, a development that could result in the agency needing to draw on taxpayer funding for the first time in its 78-year history.
Together with Fannie and Freddie, federal agencies are backing nearly nine in 10 new mortgages.
The FHA accounted for one third of loans used to purchase homes last year among owner occupants.
Though the agency guarantees fewer mortgages than either Fannie or Freddie, it now has more seriously delinquent loans than either of the mortgage-finance giants....
The FHA is Blowing Up: Bad News for the Housing Market | A Lightning War for Liberty
FHA Nears Need for Taxpayer Funds - WSJ.com