FHA bailout watch

October 8, 2009
fha

From Bloomberg, ht AK:

The Federal Housing Administration, which insures mortgages with low down payments, may require a U.S. bailout because of $54 billion more in losses than it can withstand, a former Fannie Mae executive said.

“It appears destined for a taxpayer bailout in the next 24 to 36 months,” consultant Edward Pinto said in testimony prepared for a House committee hearing in Washington today. Pinto was the chief credit officer from 1987 to 1989 for Fannie Mae, the mortgage-finance company that is now government-run.

Adding to the cost of the government’s price floor under housing.

Comments

No wonder the price of gold goes up everyday. Who wants to hold Dollars anymore? Have you seen the price of oil?

How mad is it to create a sub-prime housing crises with easy money, low down payments, government subsidized mortgage guarantees, AND THEN try to fix the problem with low-down payments, government price subsidies (homebuyer tax credit), awkwardly low interest rates (quantitative easing), and government mortgage guarantees? Sowing the seeds of our own destruction…

Posted by John Thomson | Report as abusive
 

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