The government saw this coming from the warning signs many years ago. This is a complete farce that they didn’t put a stop to this fraud.
NYT-
DO we have another Fannie or Freddie on our hands — another mortgage giant headed for a rescue?
Like Fannie Mae and Freddie Mac before it, the Federal Housing Administration is suffering in a mortgage hell of its own making. F.H.A. officials say they won’t need taxpayers’ help, but we’ve heard that kind of line before.
The F.H.A. backs $1.1 trillion of American mortgages and, by the look of things, it’s in deep trouble. Last year, its mortgage insurance fund was valued at $1.2 billion. Today that fund is valued at negative $13.48 billion.
But get this, John Carney from CNBC says it’s more like $31 Billion!
Deep in the auditors report, on page 62, it reveals that under this scenario—the scenario anticipated by the Fed itself—the economic value of the fund would fall an additional $17.58 billion, for a negative $31.06 billion. The fund’s value stays negative until 2015, when rates are expected to climb again.