Federal Government Pushes Risky Mortgage Loans

Private lenders, chastened by the mortgage crisis, have stopped issuing risky mortgage loans requiring little or no downpayment from subprime borrowers.  But the federal government continues to issue such risky mortgages, at taxpayer expense, through the Federal Housing Administration.  Congress wants to give the FHA even more ability to gamble with taxpayer funds, and is planning to expand its ability to underwrite risky mortgage loans in its costly mortgage bailout bill, which would benefit a risky mortgage lender that made “V.I.P.” loans to the bill’s sponsor, Senator Chris Dodd.