AP

BY: Washington Free Beacon Staff November 16, 2012 5:18 pm

The Federal Housing Administration (FHA) today released the results of an independent audit showing that it is in dire financial shape.

The Wall Street Journal reported:

An audit released Friday that shows the Federal Housing Administration faces projected losses of $16.3 billion at the end of September prompted housing officials to announce a series of measures designed to avoid an injection of taxpayer funds.

“Even under generous accounting rules that no other financial entity gets to use, it is insolvent,” wrote Ed Pinto, a housing expert at the American Enterprise Institute, today in an email. Pinto regularly sends out an email titled FHA WATCH.

“To make matters worse,” he continued, “this report is already obsolete and outlines a conservative estimate of the true losses incurred by the FHA.”

The report’s “base case scenario ignores the Fed’s September QE 3 announcement. FHA has once again ignored intervening events that dramatically change the base case findings in their annual report.  If the current low interest rate scenario were substituted, the FHAs FY 2012 is a negative $31 billion,” he wrote.

Continue: http://freebeacon.com/house-collapse/