Um, ok….

Frank, Dodd, Schumer, Gramm, Ted Stevens… They should all go feet-first into an industrial plastic shredder… But not before Mozilo!

FHA-Backed Loans: The New Subprime
The same people whose reckless practices triggered the global financial crisis are onto a similar scheme that could cost taxpayers tons more
By Chad Terhune and Robert Berner

As if they haven’t done enough damage. Thousands of subprime mortgage lenders and brokers—many of them the very sorts of firms that helped create the current financial crisis—are going strong. Their new strategy: taking advantage of a long-standing federal program designed to encourage homeownership by insuring mortgages for buyers of modest means.

You read that correctly. Some of the same people who propelled us toward the housing market calamity are now seeking to profit by exploiting billions in federally insured mortgages. Washington, meanwhile, has vastly expanded the availability of such taxpayer-backed loans as part of the emergency campaign to rescue the country’s swooning economy.

For generations, these loans, backed by the Federal Housing Administration, have offered working-class families a legitimate means to purchase their own homes. But now there’s a severe danger that aggressive lenders and brokers schooled in the rash ways of the subprime industry will overwhelm the FHA with loans for people unlikely to make their payments. Exacerbating matters, FHA officials seem oblivious to what’s happening—or incapable of stopping it. They’re giving mortgage firms licenses to dole out 100%-insured loans despite lender records blotted by state sanctions, bankruptcy filings, civil lawsuits, and even criminal convictions.
More Bad Debt

As a result, the nation could soon suffer a fresh wave of defaults and foreclosures, with Washington obliged to respond with yet another gargantuan bailout. Inside Mortgage Finance, a research and newsletter firm in Bethesda, Md., estimates that over the next five years fresh loans backed by the FHA that go sour will cost taxpayers $100 billion or more. That’s on top of the $700 billion financial-system rescue Congress has already approved. Gary E. Lacefield, a former federal mortgage investigator who now runs Risk Mitigation Group, a consultancy in Arlington, Tex., predicts: “Within the next 12 to 18 months, there is going to be FHA-insurance Armageddon.”

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Full article

remember something about our current “‘news’media” by allowing a bit of apochrypal anachronism..

a ‘reporter’ was walking past O’Leary’s Barn, and noticed the Lantern, close-by the Cow..

Did he move the Lantern, and summon the Fire Chief? ..Riight~ He called his ‘Photog’ for her to come down and grab some ‘Stock Footage’, you know, “for the can”..

On home, he went. Called out of bed, in the middle of the Night–Boy, did his g-friend think he Must have been Important–a whole precinct ablaze, his Editors words: “We’ve a Deadline to make!”, ringing in his ears..

By the time the Papers hit the Streets, half the City was asmoldering. The Journo? of course! a ‘Pulitzer’ for “Breaking News Reporting”, and another for “Explanatory Reporting”..the Photog even got greased w/ one for “Breaking News Photography”

The Editor, if he could string words together, in a sentence, had the inside-track on the ‘Editorial Writing’-model, but, sadly, not to be his. Happily, he was, merely, delighted with the incredible bump at the ‘News-stand’.

IOW, if you think there’s ‘News’ in the Daily PlayPer, you’re being Played, Daily.

I’m tellin’ ya, that CRA is pernicious.

Oh, yeah, Barney Frank too!!

Steve Barry and Mannwich — naively, I had been thinking that the Alt-A and Option ARM stuff was all in the current bloodbath. I am not too chipper to hear how wrong I was about that……

Just watched the 60 Minutes piece on the Alt-A and Option ARM mortgage mess about to hit us over the next few years. I can’t see how this ends well either way, regardless of short or mid-term stock market moves. Based on that piece alone, real estate is still WAY overvalued everywhere. This is going to get really ugly.

Are you kidding me? I am in my 50s and for most of my life I could never have duped a banker into getting a 100% mortgage by lying about my income. They wanted proof! W2s, tax returns, and they wanted down payments!

Are you saying the brokers and bankers are more ignorant that the borrowers? That they were duped by low income people with little education and no business savvy?

They LET it happen. The borrowers merely learned how to play the game by lying, etc, but the bankers/brokers made the rules of the game; they LET it happen!