FHA could run out of money

Federal officials are becoming concerned that the Federal Housing Administration could run out of money, prompting a taxpayer bailout for the first time in its 77-year existence. When private lenders backed off after the mortgage crisis occurred, the FHA stepped up and now currently backs about a third of all new mortgages, up from 5 percent in 2006.

Joseph Gyourko, a real estate and finance professor at the University of Pennsylvania's Wharton School, told the Wall Street Journal the FHA could be facing around $50 billion in losses in the next few years. Similarly, Paul Miller, an analyst with FBR Capital Markets, believes if the FHA tries to push defaulted mortgages back onto private lenders that originated them in the first place, some of the largest U.S. banks could face billions in losses as well.

"Unless home prices rebound, I don't understand how they're able to avoid a restructuring and a Treasury infusion," Miller said.

Further, Fannie Mae and Freddie Mac have come under fire recently from members of Congress, as it was revealed that the government-sponsored lenders were issuing bonuses to their top executives while simultaneously asking taxpayers for further funding after experiencing significant losses.

The source reported that Edward DeMarco, regulator of the Federal Housing Finance Agency, told lawmakers that the executive pay must be comparable with equivalent jobs in the private sector in order to retain talent, and therefore, are necessary.

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