Guest Post: The FHA Is Blowing Up: Bad News For The Housing Market
by Mike Krieger
The FHA has been the key element to the phony “housing recovery” the government has been trying to create. In the wake of the collapse of 2008, Fannie Mae and Freddie Mac blew up and what was left to pick up the pieces was the FHA. No private player would issue loans with down payments of 3%, but this was no problem for the FHA! Well – yes! “The Federal Housing Administration is expected to report this week it could exhaust its reserves because of rising mortgage delinquencies” This is a big deal. The FHA is already in trouble despite a miraculous “housing recovery” and we haven’t even hit a severe cyclical economic slowdown yet, which is almost certain to occur in 2013. What shambles do you think the housing market will be in once that happens and the last backstop to housing is broke?