In an F.H.A. Checkup, a Startling Number

In an F.H.A. Checkup, a Startling Number

DO we have another Fannie or Freddie on our hands — another mortgage giant headed for a rescue?

Like Fannie Mae and Freddie Mac before it, the Federal Housing Administration is suffering in a mortgage hell of its own making. F.H.A. officials say they won’t need taxpayers’ help, but we’ve heard that kind of line before.

The F.H.A. backs $1.1 trillion of American mortgages and, by the look of things, it’s in deep trouble. Last year, its mortgage insurance fund was valued at $1.2 billion. Today that fund is valued at negative $13.48 billion.

Granted, that figure, reported by F.H.A.’s auditor, doesn’t represent actual losses. It’s an estimate of the difference between future mortgage insurance premiums that the F.H.A. will collect and the expected losses on the mortgages that the agency is obligated to cover over time, combined with the agency’s existing capital resources.

Rest here…

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Comments
2 Responses to “In an F.H.A. Checkup, a Startling Number”
  1. Sarah says:

    In fact, GM implied that principle reduction on unaffordable liars loans would be a “bailout for banks”. Why? If these losses are coming from people who can’t pay let’s reduce their burden. And no, there is no moral hazard here, regardless of writers who dishonestly claim there is, the hazard exists in not helping people who are suffereing! We know what TBTF did – or have we conveniently forgotten about this? This blame the Gummint crap is expected from politicians, but G ain’t no academic, and propaganda is useful in hiding the fact that these are captive elements.
    Taboo, can’t go there!

  2. Sarah says:

    …which amounts to a Bank bailout, as it was with Fannie+Freddie. How about bailing out the affected homeowners or is housing really that low of a priority? A principle reduction would save the taxpayers money, something Gretchen can’t say, either she doesn’t know or isn’t permitted to say it.

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