FHA Next Taxpayer Bailout

Whether you know it or not, you are insuring loans that private banks and businesses are unwilling to make. Quite simply, these loans should not be made and would not be made in a free market. Yet the FHA, through its lending, is putting more of taxpayer money at risk. It will be the next government entity to require a bailout.

“With the housing and credit markets in dire straights, private lenders are asking for better credit scores and higher down payments. This means fewer people are able to qualify for conventional loans. According to the website for Housing and Urban Development (the parent organization for the FHA), the FHA’s restrictions on the kinds of loans it will guarantee are more lenient relative to conventional loans, and as such, the FHA is being called into service more and more frequently in this particular economic climate. Up by over 1200 percent since 2005, the FHA is now expected to back one quarter of all new U.S. mortgages.”

Read the full article from the Business News Examiner  here

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