The Blog of Record

If you are one of the 53% of Americans who still pay income taxes so the other 47% don’t have to, your services are about to be requested again:

Want to buy a house with just 3.5% down and high monthly payments? Talk to the Federal Housing Association, which still backs loans on terms that private lenders would never go for.

And now, the FHA is having so many problems that it may need a taxpayer bailout, reports the New York Times. Doesn’t take a rocket scientist to see a disaster in the making here.

FHA head David Stevens is trying to downplay the issue, saying his agency will not need a bailout. But at the same time, he admits that 20% of the loans the FHA insured last year are facing foreclosure or other serious problems, according to The New York Times.

The FHA wasn’t meant to turn out like this. It was created to facilitate home purchases for lower-income and first-time buyers with government-backed loans.

But now, many banks are asking for 20% down, or they have other strict lending requirements. And so the FHA has become a place to turn for people that don’t have that kind of cash. That has left the FHA insuring about 6,000 loans a day, the Times reports.

A government agency insuring mortgages for Democratic voters needs a bailout? Consider it done.

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