If you were curious what unhealthy growth looked like, take a look at this chart from an article in the Wall Street Journal.
Per the WSJ, the FHA expects defaults on 24 percent of all loans insured in 2007 and 20 percent of those originated in 2008.
FHA’s market share, which was just 1.9 percent in the fourth quarter of 2006, climbed to nearly 25 percent in the fourth quarter of 2008.
The FHA has seen lending absolutely surge between fiscal years 2006-2009, and now they face the prospect of a capital shortfall, which could require a taxpayer bailout.
Oh, and the FHA has apparently delayed the release of a financial audit (without explanation) due out today, per National Mortgage News.
Could it be that ugly?