Why The FHA Bailout Should Surprise No One...

[AmazonTania]

My what a difference 5 years make. After all the fan fare about how the administration 'rescued' the mortgage market, the supposed housing recovery and 3 Trillion of liquidity provided by the Federal Reserve, it was assured the worse was over. Right? Well, today the FHA just announced that it needs a Government Bailout for the first time in it's 79 year history. It's really not all that surprising, being that the FHA failed it's Federal Reserve stress test a few months ago. The agency was to exceed it's reserves by 13.5 billion in over 30 years.

WASHINGTON (AP) — A federal housing agency said Friday it needs a $1.7 billion bailout from the Treasury to cover projected losses in its reverse mortgage programs which allow seniors to borrow against their homes for everyday living expenses.

Federal Housing Administration Commissioner Carole Galante told Congress in a letter that her agency will withdraw the money from the Treasury before the fiscal year ends Monday. Congressional approval is not required. The cash infusion is the first in the agency's 79-year history.
The agency, which insures 40 million home mortgages, is struggling with $5 billion in losses on its reverse mortgage program.
Reverse mortgage borrowers, who must be 62 or older, can take lump-sum or monthly payments. They still must pay property taxes and insurance. Sale proceeds from a home go to the lender when the borrower dies or moves out.
The FHA suffered big losses when many borrowers took large payments up-front and later ran into financial problems, often due to falling home values during the financial crisis.
The agency has sufficient cash to pay insurance claims against mortgage defaults, Galante said, citing more than $30 billion in cash and investments on hand.

http://bigstory.ap.org/article/fha-d...y-cover-losses

[zelmo1234]

Yep! no surprise here at all. What are your thoughts on Fannie and Freddie? Are they next?

[Ethereal]

Just a few billion more moving around in Washington DC's multi-trillion dollar slush fund.

Why D.C. Is the Richest Region in the Country

One result is that, today, for the first time, most of America's richest counties are in the Washington area. Of the richest 1 percent of counties in the U.S., 43 percent surround the nation’s capital city.

...average total compensation for a federal employee is now about $120,000, and the gap between government pay and private pay has been growing.

[Codename Section]

Just a few billion more moving around in Washington DC's multi-trillion dollar slush fund.

Why D.C. Is the Richest Region in the Country

One result is that, today, for the first time, most of America's richest counties are in the Washington area. Of the richest 1 percent of counties in the U.S., 43 percent surround the nation’s capital city.

...average total compensation for a federal employee is now about $120,000, and the gap between government pay and private pay has been growing.

Devil dog, don't hate. I live there.

[jillian]

Just a few billion more moving around in Washington DC's multi-trillion dollar slush fund.

Why D.C. Is the Richest Region in the Country

One result is that, today, for the first time, most of America's richest counties are in the Washington area. Of the richest 1 percent of counties in the U.S., 43 percent surround the nation’s capital city.

...average total compensation for a federal employee is now about $120,000, and the gap between government pay and private pay has been growing.

you know 120,000 isn't a lot for them compared to the private sector, right? it doesn't even put them into the top 1%

darryl issa is the wealthiest member of congress with a net worth of 355 million dollars

http://losangeles.cbslocal.com/2013/...t-in-congress/

remember that when you ask why he behaves as he does...and remember that congress never cuts its own pay when it talks about "cutting the deficit"...no matter how many days off they take.

just saying.

[Ethereal]

you know 120,000 isn't a lot for them compared to the private sector, right? it doesn't even put them into the top 1%

The single mother who works at Walmart is in the "private sector", so how are you measuring its income?

darryl issa is the wealthiest member of congress with a net worth of 355 million dollars

http://losangeles.cbslocal.com/2013/...t-in-congress/

remember that when you ask why he behaves as he does...and remember that congress never cuts its own pay when it talks about "cutting the deficit"...no matter how many days off they take.

just saying.

Just to clue you in, and I'll only say this once, I am NOT a Republican, so attacking them will not upset me in the least, nor will it undermine my political philosophy.

[jillian]

The single mother who works at Walmart is in the "private sector", so how are you measuring its income?



Just to clue you in, and I'll only say this once, I am NOT a Republican, so attacking them will not upset me in the least, nor will it undermine my political philosophy.

and where in my post did i mention the word "republican" or any party. i mentioned a specific (grandstanding) congressman...

and talked about how the entire congress doesn't cut its own pay.

soooo while i appreciate that you're not a republican.. i'm wondering why you felt i was attacking any group in particular.

[Ethereal]

and where in my post did i mention the word "republican" or any party. i mentioned a specific (grandstanding) congressman...

And why did you mention him?

and talked about how the entire congress doesn't cut its own pay.

Yes, and?

soooo while i appreciate that you're not a republican.. i'm wondering why you felt i was attacking any group in particular.

Because you're obviously an Obama supporter.

[Chris]

Well, jillian has managed to side track another thread.

[Chris]

My what a difference 5 years make. After all the fan fare about how the administration 'rescued' the mortgage market, the supposed housing recovery and 3 Trillion of liquidity provided by the Federal Reserve, it was assured the worse was over. Right? Well, today the FHA just announced that it needs a Government Bailout for the first time in it's 79 year history. It's really not all that surprising, being that the FHA failed it's Federal Reserve stress test a few months ago. The agency was to exceed it's reserves by 13.5 billion in over 30 years.

This, while I get it's a continuation of the housing bubble failure which was supposed to have been fixed, seems to be a case now of government being to big to fail.


I find it difficult to believe the FHA does not have to ask Congress for approval but can simply take the money and bail itself out.