(Image source: Bloomberg / Patrick T. Fallon) BY CLIFF JUDY The latest government bailout starts the week,
and it doesn’t require congressional approval to use your tax dollars. “The Federal Housing Administration needs
a $1.7 billion bailout. The FHA will draw the money from the U.S. Treasury to help cover
losses from troubled loans.” (Via WPLG) The FHA stepped in during the housing crisis
to help seniors with reverse mortgages, which is part of why this bailout comes so late. Many seniors took on the loans to pay for
everyday expenses, but that increased their debt and decreased home values still haven’t
fully recovered. (Via Housing Wire) One expert told Fox News the much larger housing
bailouts of Fannie Mae and Freddie Mac had only one-third the serious delinquency pay
rates of the FHA and predicted reverse mortgages as a bad investment. Anthony Sanders, George Mason University:
“I testified in that hearing. I said, ‘Don’t do this. It is going to blow up on us.’ And
here we are. Five billion dollars in reverse mortgage losses.” So how much are we really talking here? Because
rumors of a possible FHA bailout started years ago, and the Obama administration warned only
five months ago the FHA would need about half of what it’s asking for now. (Via The New
York Times, The Daily Caller) The Los Angeles Times government accounting
rules hide the true problem. Edward J. Pinto, American Enterprise Institute:
“This number that they’re asking for is a very small number relative to the FHA’s real
financial condition. The FHA is woefully insolvent.” Pinto predicted the FHA will eventually need
$25 billion to get out from under these loans. The 79-year-old agency plans to draw the cash
for its first ever bailout by Monday, the last day of the fiscal year.