FHA's $16B Shortfall Adds Urgency To Mortgage Policy Fight

Law360, New York (November 16, 2012, 8:32 PM EST) -- The prospect of an unprecedented government bailout of the Federal Housing Administration, raised Friday by an audit that revealed a $16 billion shortfall in the agency's reserves due to mortgage delinquencies, will lend a new urgency to fights in Washington over what role the federal government should play in the mortgage market.

Even before the real estate bubble burst, lawmakers and regulators had struggled with how to get more private money into the mortgage market while maintaining the government's role in promoting homeownership.

The likely bailout...
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