The Financial Times reports that the White House believes the Federal Housing Administration—the agency concerned with approving loans for first time applicants and those with poor credit—will need a massive bailout. Writes the FT:
The White House has forecast a $688m bail-out of a federal housing agency dedicated to helping first-time homeowners and borrowers with poor credit.
A taxpayer-funded bail-out of the Federal Housing Administration would be a first and comes as increasing defaults on its nearly $1.1tn book of home loans exhaust its dwindling reserves. ...
[E]ven the forecast of a potential taxpayer infusion underscores the precarious fiscal position of the FHA, which has seen its balance sheet balloon in the wake of the most punishing economic downturn since the 1930s.