The financial recession that we are still trying to crawl out of was in large part connected to the mortgage policies of our federal government that we are still spending billions each month to bail out our government.
No one is held accountable. The taxpayer just continues to be on the hook.
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At last report, the FHA has a negative $1.3 billion net work, and that is after a $1.7 billion treasury capital infusion in September.
FHA insures more than $1 trillion in loans and has now missed its federally mandated 2 percent minimum capital standard for five years (try 19-25 percent) and it was not even caught up in the pre-2007 subprime years. The best guess is that the FHA is in red ink somewhere between $7.9 billion and 10.6 billion.
The underlying problem is that the FHA's woes derive from a policy of public risk and private profit, which is what became so problematic with Fannie Mae and Freddie Mac.
There are many things we tax payers cannot change but we can contact our congressional representatives to support Texas Republican Jeb Hensarling's proposal to spin off FHA from the Department of Housing and Urban Development, make it a stand-alone agency, focus its mission on low-income and first-time buyers, and subject it to the same accounting rules that private lenders have to meet.