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The Next Taxpayer Bailout: The Federal Housing Administration

snappercat Wrote: Dec 25, 2012 8:08 PM
Reverse mortgages are just a scheme to steal equity from the elderly and their heirs. No more loans to people with bad credit. No more loans to people with no down payment. No more bonuses to executives working for organizations that make these poor business decisions - in fact the execs should be held personally liable for the losses. No more bailouts for banks, for unions, for auto companies, for people who should never have applied for a loan, no more taxpayer money to subsidize stupidity.
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...