FHA Bailout Fear
For years, the administration has denied FHA troubles. But emails reveal it not only knew of them, but also withheld evidence of projected insolvency from Congress.
Under Obama, the Federal Housing Administration has increasingly backed new home loans to so-called rebound borrowers who recently defaulted on past mortgages.
The agency is letting lower-income borrowers get loans just three years after foreclosure with as little as 3% down and subprime-low credit scores. In fact, 40% of newer FHA-backed loans are subprime.
The risky lending has led to higher delinquencies. Now at 17%, delinquencies on FHA loans are so high the administration has extended the grace period for repayments on troubled loans to a full year.
