The Federal Housing Administration used to be a little-known government agency before the housing meltdown. But when Fannie Mae and Freddie Mac collapsed, the FHA started backing more and more loans to homeowners. Now, a growing number of borrowers are defaulting on loans backed by the FHA — and some are wondering if the FHA itself might soon need a bailout.
We find out how the agency is trying to weather the storm created by increased lending. We also get a first-hand look at how the housing crisis is affecting Cleveland, Ohio.
Brett Barry, a broker with Homesmart in Phoenix, Ariz., is a fierce critic of the FHA's low down-payment rates. But the FHA's commissioner, David Stevens, told us that the FHA has sufficient reserves to deal with the increased lending. Ida Lieszkovsky reports from WCPN in Cleveland, where a home abandoned to foreclosure recently exploded, making six other families homeless.
See images of the foreclosed house that exploded in Cleveland thanks to Ida Lieszkovsky: