The Federal Housing Administration, which insures mortgages with low down payments, may require a U.S. bailout because it has $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.
The FHA program’s volumes have quadrupled since 2006 as private lenders and insurers pulled back amid the U.S. housing slump, Pinto said. The jump has left the agency backing risky loans and exposed to fraud in a “market where prices have yet to stabilize,” he said.
Can you just smell the genius here? Who but government could think of this? I mean, it takes that extra, special level of liberal government intellect to go on a lending spree when the economy is collapsing! Boy, wish I had thought of that – we conservatives sure can learn from liberals!
And don’t think its 36 months before we have to bail the government out, again – 6 to 9 months is more like it.
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