FHA Completes Gov't Self-Bailout Trifecta

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Investors Business Daily:

Housing: After years of covering up FHA's losses, the administration now seeks a multibillion-dollar bailout for its new subprime mortgage anchor program — as we predicted.

 

Over the past three years, we've criticized the administration for using the FHA to pick up the subprime slack left by government-plundered Fannie Mae and Freddie Mac. We warned that the housing agency faced mounting losses from a raft of new subprime loans and would need a taxpayer bailout.

 

The FHA called such reports "irresponsible." Now it's quietly hitting taxpayers with a $1.7 billion bailout.

 

In a letter Friday to Congress, the agency said it needed money to stabilize its long-term finances and cover potential losses on a surge in low-down-payment subprime mortgages. It marks the first time the FHA, which insures $1.1 trillion in mortgages, will require taxpayer funding in its 80-year history.