Tuesday, November 15, 2011

WSJ: FHA "Could Run Out of Money"

Timiraos, N. (2011, Nov 15). Mortgage Insurer's Cash Depleted, Auditor Warns. The Wall Street Journal, A3. print version

"The FHA's cash reserves have fallen so low that there is a 'close to 50%' chance the agency could run out of money and require a taxpayer bailout in the next year, according to the annual independent audit of the FHA's finances...

"...the report assumes that home prices will fall 5.6% this year before hitting bottom and then rising by 1.2% in 2012... However, there is close to a 50% chance that home prices could suffer greater declines, according to the report...

"...One worrying sign is that mortgage delinquencies remain high on FHA loans..."

MAJIA HERE: There can be no recovery without a reduction in outstanding debt and a recovery of income for the bottom half of the US population. Government policy has not addressed either of these mandates.

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