Released: May 07, 2008

For FHA, a huge task and uncertain role

Source: Dina ElBoghdady, Washington Post (Free Registration)

The Federal Housing Administration has a big new role to play in untangling the mortgage mess, but even the agency itself does not know whether it can or should handle some of the tasks it is being asked to perform.

After steadily losing relevance and customers to aggressive private lenders during the housing boom, the FHA is being asked to “pick up the pieces,” as one official put it, for strapped borrowers.

Just about every major housing proposal has the FHA helping refinance troubled borrowers into its government-backed mortgages. By doing so, the agency would take on even riskier loans than it is used to handling. 

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