FHA the Next Government Bailout?

November 16th 2001 The Next Big Government Bailout?
The Federal Housing Administration or FHA is a United States government agency created as part of the National Housing Act of 1934. It insured loans made by banks and other private lenders for home building and home buying. The FHA, however is running into fiscal meltdown. It is possibly the next big entity needing a government bailout and that means the tax payer will foot the bill. The agency will exceed its reserves if the prices of housing continues to drop. So if home prices continue to drop the FHA will need to either seek a bailout from the Treasury Department or once again increase the premiums it charges borrowers. Most of the agency's problems stem from the loans it insured prior to the middle of 2009, it has insured hundreds of billions of new loans in the past three years and this carries inherit risks. There are also fewer buyers are turning to FHA-insured loans and this is one of the factors that the FHA is counting on to not need a bailout. The goals of this organization are to improve housing standards and conditions, provide an adequate home financing system through insurance of mortgage loans, and to stabilize the mortgage market, however, where I ask is the stability of this government entity that will now quite likely see taxpayers, once again, footing the bill for an agency that is supposed to help them.

http://money.cnn.com/2011/11/15/news/economy/fha_bailout/index.htm