Next on the bailout parade: FHA?
That's made some industry folks very nervous. In the "what goes up rapidly might reverse course and go splat" sense.
The Wall Street Journal reports today that rising defaults on FHA loans are endangering the agency's reserves:
Options for the agency could include politically unpalatable choices, such as asking for taxpayer funds to boost reserves or increasing the premiums borrowers pay for the insurance offered by the agency. Agency officials say if there is a shortfall, they don't have to do anything except report it to lawmakers. But some mortgage and housing analysts see trouble ahead. "They're probably going to need a bailout at some point because they're making loans in a riskier environment," says Edward Pinto, a mortgage-industry consultant and former chief credit officer at Fannie Mae. "...I've never seen an entity successfully outrun a situation like this."