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The Next Taxpayer Bailout: The Federal Housing Administration

John_Indiana Wrote: Dec 26, 2012 7:32 AM
Try to get out on Mom and Dad's basement more often.
The Federal Housing Administration (FHA), hit hard by the collapse of the housing bubble, is still making risky loans on the taxpayers' dime, and may need a bailout in 2013.

An exhaustive study of the subject by the American Enterprise Institute's Edward Pinto reveals some shocking statistics:

An estimated 40 percent of the FHA’s business consists of loans with either one or two subprime attributes—a FICO score below 660 or a debt ratio greater than or equal to 50 percent (based on loans insured during FY 2012). The FHA’s underwriting policies encourage low- and moderate-income...