Five Years Later: FHA Demands $1.7 Billion Treasury Bail Out

One would think that five years after the bail out of the GSEs, that the Federal Housing Agency, the government agency created to insure loans made by banks and other private lenders for home building and home buying, would be stable and growing. After all, the "housing recovery" and those $3 trillion (and rising exponentially) in liquid injections by the Fed should have assured it. Right? Wrong. Moments ago, the FHA, just as we predicted [4], officially announced it needs a government bailout - the first in its 79 year history - in the form of a $1.7 billion in funding from the Treasury to "cover projected losses in a mortgage program for seniors" and specifically losses due to reverse mortgages: those Fonzy-advertized fake piggy bank programs that end up anyone who uses them through the nose, and now taxpayers too. But... but... but... if the FHA just failed.... does that mean they lied about the housing recovery too? Unpossible!

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