When I was Assistant Secretary of Housing-Federal Housing Commissioner cleaning up the last housing and mortgage bubble bust, I used to have a deputy who said “FHA is where mortgages go to die.” That’s because the banking and mortgage industry would intentionally perpetrate fraud and engage in unsound lending practices. Then, when the market turned, they and their investors would keep their profits and would simply put their mistakes back to FHA and the government. Well, check out this morning’s announcements. Here we go again.
Worried Bankers Seek to Shift Risk to Uncle Sam
By Damian Paletta – Wall Street Journal (14 Feb 2008)