This is why market manipulation and bailouts don't work in the long-term. Also, it's typical of the government to say everything is fine when reality is the opposite.an independent audit of the FHA released Friday showed that mounting losses from mortgage delinquencies — particularly on loans the FHA backed between 2007 and 2009 — left the agency’s reserves with a projected $16.3 billion deficit as of Sept. 30.
Friday’s results underscored the debate about the proper role of the government in backstopping the nation’s housing market and how much risk taxpayers should face in order to ensure that mortgage markets continue functioning through good times and bad. Roughly nine out of 10 new mortgages are backed by the federal government.
http://www.washingtonpost.com/busine...857_story.html