Source: Kenneth Harney, Washington Post ( Free Registration )

In the current credit squeeze, if you have less than a 20 percent down payment, there’s pretty much only one major source of mortgage financing available: the Federal Housing Administration, the Depression-era home loan insurance agency that still offers 3 percent down, 30-year, fixed-rate mortgages with consumer-friendly credit standards, even on jumbo loans in high-cost areas of California and the East Coast.

But there is a potentially troublesome problem looming for the FHA: New loan volume is exploding - tripling in the past 12 months alone - and Congress has handed the agency the responsibility for almost all the government’s efforts to keep economically distressed homeowners out of foreclosure by refinancing their unaffordable loans.

Read Full Article: What the FHA needs to get the job done