Townhall tells MHProNews the Federal Housing Administration (FHA) continues to make risky loans to borrowers with low credit scores and/or high debt ratios. Based on zip codes, these borrowers have an expected foreclosure rate of 15 percent, accounting for 44 percent of FHA loans to people of low to moderate means. Not only are taxpayers exposed to the possibility of a bailout, but foreclosures and the ensuing blight reduce the tax rate, making it tougher for municipalities to provide services to those neighborhoods. Backing over $1 trillion in U.S. home loans, the FHA may be facing a $16.3 billion shortfall by the end of Sept. 2013, according to an article in The Wall Street Journal. FHA is attempting reforms that may or may not be successful, but time may be running out for an effective correction to be made.
