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Eye on the bailout: FHA faces mounting challenges

September 5, 2009 --

By PAUL KIEL, ProPublica

Among the crowd of government agencies that have rushed to aid the economy, the Federal Housing Administration often gets overlooked. And yet, along with Freddie Mac and Fannie Mae, the FHA has played a huge role in preventing a complete housing collapse. All together, those three currently buy or guarantee more than 90 percent of mortgages. But the FHA is facing mounting losses and, The Wall Street Journal reports, it may soon be forced to notify Congress that its reserves have slipped below the mandated level. What will happen at that point, nobody seems to know.