In response to:

The Next Taxpayer Bailout: The Federal Housing Administration

wbenton Wrote: Dec 25, 2012 8:24 PM
I business it is important what you measure because it will drive the results that you get, and the behaviors of people to achieve the measurements. A failing in government for a long time has been the key metric of the number of home owners. By simply pushing to have more home owners as a measure of success people made all sorts of bad decisions to boost up the number of home owners resulting in lending practices that cannot be sustained. Lending policies back in the day were based on actuarial analysis, not on political fairness. The change resulted in the mess we are dealing with today. Unfortunately the fixes are being made by the same political fairness guys, not the people who understand the boundaries of sustainable loan policy.
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...