Despite massive government subsidies, the government can't abolish the consequences of a free market.

Mortgage insurance has become increasingly difficult to get during the housing crash.

The major issuers of mortgage insurance have either gone out of business or substantially modified their business because they can't keep taking such losses.

Read more on The F.H.A. Tightens Standards For Mortgage Insurance…

I expect they'll ask for a massive government bailout. Politicians will keep using the FHA to subsidize homeowners risky decisions to buy more home than they can afford. I expect the FHA will keep guaranteeing mortgages with low down payments. I expect politicians will keep subsidizing the risky behavior that got us into this mess.

Read more on FHA Going Broke…

It has guaranteed thousands of defaulted home loans. Big surprise. It now needs a bailout.

The government stepped in to insure home loans that free market lenders did not want to guarantee.

Read more on FHA Needs A Bailout…

Here's some scary testimony to Congress, that 20 percent of F.H.A. loans insured last year — and as many as 24 percent of those from 2007 — faced serious problems, including foreclosure, offering a preview of a forthcoming audit of the agency’s finances.

Read more on About 25% Of FHA Loans From Past 2yrs In Trouble…

The FHA's cash reserves have fallen — for the first time ever — below the minimal levels set by Congress.

About 25% of home loans in the US are guaranteed by the FHA.

Read more on Federal Housing Administration Smash By Mortgage Crisis…

President Obama, our nation turns its lonely eyes to you.

It's like he's the second coming of Franklin Delano Roosevelt.

High on the agenda is shoring up America's banks. The two biggest — City and Bank of America — are shaky. The Fed has invested tens of billions of dollars in them. Despite this, they still totter.

Read more on How Best To Employ The Federal Housing Administration…

Will the US Federal Reserve and Treasury Department do something to stem foreclosures?
Congress wants them to.
But what can be done?
Why should people who bought more house than they could afford get subsidized?
Why subsidize bad decisions? You'll only get more of them.
There's $350 billion left to spend. FDIC chair Sheila Bare's plans remain popular with Congress. It would have the US government guarantee mortgages in exchange for loan modifications. Sheila reckons her plan could stop 1.5 million foreclosures through 2009, costing the US economy about $25 billion.
The Federal Housing Administration launched a "Hope For Homeowners" program. It passed Congress in July. It will insure up to $300 billion worth of loans, helping up to 400,000 homeowners.
Economist Martin Feldstein offers a plan: Have the US government offer a new loan with lower interest rates in the place of a bad loan.
Barney Frank keeps pushing for more mortgage relief. He loves government intervention.
What good have all these bailouts done? The economy seems to be in worse shape than ever. Are you serious that the economy would be in worse shape without the bailouts? The $700 billion bank bailout was supposed to open up the credit market. It has not happened. How has the money been spent? We don't even know. It's outrageous.
There will be a fight over the second part of the TARP. The first part has done nothing for the economy nor the credit market.
The second round of the TARP will only become available, if ever, under President Obama.
The first round was used up the $17 billion auto company bailout. Ford company did not want any funds.
The US Treasury must now submit its plans to the US Congress for approval to spend the next $350 billion.
Dec. 20 (Bloomberg) — Congress will use the remaining $350 billion in a U.S. bank-rescue package to force the Bush administration and President-elect Barack Obama into providing foreclosure aid as the pace of people losing their homes soars.

Read more on Will Homeowners Benefit From The Bank Bailout?…

From the New York Times:

During the subprime boom, the Federal Housing Administration, created in 1934 to help lower-income and first-time buyers purchase homes, all but sat out the party.

Borrowers abandoned the FHA in favor of conventional loans that were both easier to qualify for and less expensive. The agency does not itself issue mortgages but it insures lenders that do, and its insurance pool is financed by premiums paid by homeowners who use its programs.

Read more on Federal Housing Administration Updates…

From the Washington Post:

President-elect Barack Obama has picked New York City housing commissioner Shaun Donovan to be secretary of housing and urban development, a post that Obama said would play a lead role in his administration's efforts to stem the rising tide of foreclosures and rebuild the nation's efforts to expand homeownership.

Read more on Federal Housing Administration News…

The FHA (Federal Housing Administration) is insuring thousands of subprime loans. They're insuring loans for those without much income. Yep, those who created the subprime crisis are using the FHA program encouraging home ownership.

Read more on Will FHA Loans Meltdown?…