Adventure is worthwhile - Aesop

The Next Fiscal Bomb

by Hal_10000

FHA loans.

As if they haven’t done enough damage. Thousands of subprime mortgage lenders and brokers—many of them the very sorts of firms that helped create the current financial crisis—are going strong. Their new strategy: taking advantage of a long-standing federal program designed to encourage homeownership by insuring mortgages for buyers of modest means.

You read that correctly. Some of the same people who propelled us toward the housing market calamity are now seeking to profit by exploiting billions in federally insured mortgages. Washington, meanwhile, has vastly expanded the availability of such taxpayer-backed loans as part of the emergency campaign to rescue the country’s swooning economy.

For generations, these loans, backed by the Federal Housing Administration, have offered working-class families a legitimate means to purchase their own homes. But now there’s a severe danger that aggressive lenders and brokers schooled in the rash ways of the subprime industry will overwhelm the FHA with loans for people unlikely to make their payments. Exacerbating matters, FHA officials seem oblivious to what’s happening—or incapable of stopping it. They’re giving mortgage firms licenses to dole out 100%-insured loans despite lender records blotted by state sanctions, bankruptcy filings, civil lawsuits, and even criminal convictions.

Nice to know that our politicians can always find the solution to the last problem.  How long until the FHA explodes and is blamed on an under-regulated market?

Comments

Posted by mikeguas on 11/21/08 at 10:48 PM from

Hey check this out. Begging the Saudis and other gulf states for money. Before too long, we’ll be having our hand out to the Iranians, and then the Russians. FUCKING PATHETIC.

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