Meanwhile, while the U.S. housing market continues its multiyear recovery, the time of bailouts hasn't ended, as the Federal Housing Administration on Friday announced it would require an infusion of $1.7 billion from the U.S. Treasury to cover loan losses. This is the first time FHA in its 79-year history has ever needed to borrow money to stay afloat.
FHA Commissioner Carol Galante in a letter to Congress said the agency was unlikely to need a cash infusion from the Treasury during 2014.
Rep. Jeb Hensarling (R., Texas) -- the Chairman of the House of Representatives Financial Services Committee -- in a statement on Friday said "If the FHA was a private financial institution, likely somebody would be fired, somebody would be fined, or the institution would find itself in receivership. Instead, the FHA is merrily on its way to becoming the recipient of the next great taxpayer bailout."
"The FHA is clearly headed toward financial disaster and taking taxpayers along for the ride," Hensarling added. "Unless Congress enacts sustainable housing finance reform, it's possible taxpayers will be forced to write blank bailout checks to the FHA indefinitely. That is unacceptable, and it is further evidence Congress needs to pass the sustainable housing finance reforms found in the PATH Act."