The Federal Housing Administration's boss is saying he'll need no bailout, "absent any catastrophic home-price decline."
The New York Times is flashing red on this one, and it's an entertaining read.
U.S. Rep. Barney Frank (D-Mass.): A 7-plus percent FHA foreclosure rate is no bad thing: "I don't think it's a bad thing that the bad loans occurred," he said. "It was an effort to keep prices from falling too fast. That's a policy."
FHA-which used to make sellers fix houses to exacting standards-last year put a divorced, bankrupt single mother into a $134,000 "fixer-upper," with just 3.5 percent down. She now spends half her take-home pay on her mortgage-$1,100. And as for the fixing-up part? She took two weeks to clean the garbage in the back yard.
At this rate she should have a nice house in about . . . never.
The Times saves the best for last, though, introducing us to Chaz Fullenkamp, a 22-year-old mechanic in Columbus, Ohio, who this spring paid $179,000 for a house with FHA backing, paid no closing costs, and then applied for his $8,000 first-time homebuyer tax refund.