November 14, 2009
Ladies and Gentlemen:
Your editorial “The FHA’s Bailout Warning” states that the deterioration in The Federal Housing Administration’s (FHA) financial position “is the result of the agency’s plunge into high risk loans over the last two years.”
The current problems in the financial condition of FHA and its parent agency, the US Department of Housing and Urban Development (HUD), have older roots. For example, HUD refused to produce audited financials in fiscal 1999 as required by law and used $59.6 billion in “undocumentable adjustments” to close its books.
At that time the chief of staff to the Chairman for the Senate appropriations subcommittee overseeing FHA and HUD confessed to me that the agency “was being run as a criminal enterprise.” (See here)
Understanding FHA’s current financial condition requires an investigation of what has happened to the billions that have disappeared through the agency’s accounts.
Sincerely Yours,
Catherine Austin Fitts
Former Assistant Secretary of Housing – Federal Housing Commissioner, Bush I