I saw this initially on Calculated Risk
and was surprised it wasn't a bigger deal: The Federal Housing Administration is being audited, and it appears the audit isn't going well
A much-anticipated audit of the Federal Housing Administration was abruptly postponed just before it was supposed to be made public, after questions arose about its accuracy.
The auditor, Integrated Financial Engineering, said it notified the F.H.A. late Tuesday that its computer models were creating unexplained inconsistencies. A news conference scheduled for Wednesday morning was canceled.
The delay came amid broad public concern about the financial condition of the F.H.A., and appeared likely to add to questions about whether the agency is running excessive risks with taxpayers� money.
Sure a bad time for this, particularly given Barney Frank's continuing headache with Fannie Mae
Fannie Mae reported a net loss of $18.9 billion in the third quarter of 2009, compared with a loss of $14.8 billion in the second quarter of 2009. ... Third-quarter results were largely due to $22.0 billion of credit related expenses, reflecting the continued build of the company�s combined loss reserves and fair value losses associated with the increasing number of loans that were acquired from mortgage backed securities trusts in order to pursue loan modifications.
As a result, on November 4, 2009, the Acting Director of the Federal Housing Finance Agency (FHFA) submitted a request for $15.0 billion from Treasury on the company�s behalf.
Yup, another $15 billion going into Fannie to bail out the housing industry. Congress' answer? Keep more first-time homebuyer credits flowing
. Damn the pusher
asked if we were smart to throw them $200 billion back in February. At the rate they're going Fannie will burn through that in three years. $2000 from every household. And their financial modeler determining how to do those loan mods? Yup, Integrated Financial Engineering, the same guys bungling the FHA audit. Fingerpointing between IFE and FHA has already begun. If the audit shows FHA's capital ratio drops below 2%, you either have to get higher premiums on mortgage insurance or, unsurprisingly, a cash infusion from the government.
Labels: banking, economics, housing