FHA's $54 Billion in Losses May Require a Bailout by U.S.
 

so guys from us prepare your pockets for a tax raise sometimes next year, another bailout on the way.
now this was fucked up directly by us goverment, not greedy banksters

http://www.calculatedriskblog.com/20...lout-seen.html
FHA Bailout Seen
by CalculatedRisk on 10/08/2009 11:34:00 AM

From Bloomberg: FHA Shortfall Seen at $54 Billion May Lead to Bailout (ht Mike in Long Island, Ron at WallStreetPit)

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 ...
Pinto makes several points, including:

"FHA is making much larger loans than in the past. Its top dollar limit is $729,500 versus its old top of $362,000 in 2008." This exposes the FHA more to high risk states like California.

"FHA allows up to a 6% seller concessions before requiring an appraisal adjustment." Pinto notes that Fannie Mae found that allowing concessions above 2% before adjustments led to much higher defaults.

High LTV lending is a higher percentage of loans today (23%) than in 2006 (17%). This is due to the large increase in FHA insured loans.

The first-time homebuyer tax credit is being used as a downpayment, and Pinto draws a comparison to the horrible default performance of the DAPs (downpayment assistance program) loans.

"FHA's early warning database indicates loan performance is deteriorating." See pages 6 and 7 of testimony for details. Note: I posted some data before, see FHA Lenders with High Default Rates

"The first-time homebuyer tax credit is being used as a downpayment"

This is false i know for a fact. We don't even qualify for it even thu we bought our house in July but since we close in January we wont get the credit unless they carry it over to 2010