FHA Loan Cover Up - Obama Scandal #7 Or Is That 8

Discussion in 'Politics' started by pspr, Jun 8, 2013.

  1. pspr


    President Scandal is at it again. More shit is about to hit the fan!

    Subprime: For years, the administration has denied FHA troubles. But emails reveal it not only knew of them, but also withheld evidence of projected insolvency from Congress.

    Under Obama, the Federal Housing Administration has increasingly backed new home loans to so-called rebound borrowers who recently defaulted on past mortgages.

    The agency is letting lower-income borrowers get loans just three years after foreclosure with as little as 3% down and subprime-low credit scores. In fact, 40% of newer FHA-backed loans are subprime.

    The risky lending has led to higher delinquencies. Now at 17%, delinquencies on FHA loans are so high the administration has extended the grace period for repayments on troubled loans to a full year.

    Last year, the FHA secretly conducted a Fed-style stress test that found agency losses could hit $115 billion. Because the results were politically embarrassing, FHA chose to not disclose them. The agency even directed its outside auditor to leave the fact that such a test had been performed out of a report released to the public in November.

    All this is revealed in FHA emails obtained by the House Oversight and Government Reform Committee, which is investigating the troubled agency.

    In an email, FHA officials told the independent auditor: "We just do not want that analysis to be in the actuarial review report."

    They continued: "In congressional hearings, it is quite possible that we will be required to present this information on-the-record, but that will be well after the actuarial review is released and the initial media coverage takes place."

    That actuarial review, bad as it was, found that FHA losses could hit $13.5 billion under current economic conditions, and $65.4 billion under a worst-case scenario. At the time, FHA pooh-poohed the findings, arguing its independent auditor had it all wrong.

    But the situation was even worse than the grim report disclosed. The administration appears to have deliberately misled the public by omitting the most salient findings.

    This is the same stress test the administration uses against banks to confirm their solvency. Yet when it fails the same test, it hides the results.

    "Any publicly traded private company engaging in practices similar to what FHA is alleged to have done, would be hearing from the SEC and be on the wrong side of a flurry of class-action lawsuits," notes Edward Pinto, a former chief Fannie Mae credit officer who's been sounding the alarm about FHA for years.

    This latest political cover-up begs for a fuller investigation.

    Responsible officials should be held to no less standard than the private sector.

  2. LEAPup


    They didn't have to make payments for a year?:eek: What his gets down to is pure and simple vote buying.
  3. pspr


    Nearly everything he does is vote buying or pandering. His policy revolves around it.