While Fannie Mae, Freddie Mac, and private lenders have deservedly garnered the bulk of attention and blame for the mortgage crisis, other federal programs also distort our mortgage market and put taxpayers at risk. The most prominent of these agencies is the Federal Housing Administration (FHA). The FHA currently backs an activity portfolio of over $1 trillion. Relatively small changes in the performance of the FHA’s portfolio could result in significant losses. As the taxpayer is, by law, obligated for any losses under FHA, these are not losses that can be avoided. Reasonably foreseeable changes to FHA’s performance could easily cost the taxpayer tens of billions of dollars, surpassing the ultimate cost of the Troubled Asset Relief Program bank bailouts. The panel will examine the fiscal health of FHA and examine policy proposals for reducing both the likelihood and severity of a taxpayer rescue of FHA.
Featuring the author Angus Deaton, Dwight D. Eisenhower Professor of Economic and International Affairs, Woodrow Wilson School of Public and International Affairs & Economics Department, Princeton University; with comments by Charles Kenny, Senior Fellow, Center for Global Development; moderated by Ian Vasquez, Director, Center for Global Liberty and Prosperity, Cato Institute.
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The 2008-2009 financial crisis and Great Recession have vastly increased the power and scope of the Federal Reserve, and radically changed the financial landscape. This new ebook examines those changes and considers how the links between money, markets, and government may evolve in the future.