Business week has an interesting article about FHA loans, which they refer to as “the new subprime.” These Federal Housing Authority-backed loans are designed to encourage homeownership by helping people with modest means qualify for a loan.

Washington, in the midst of the mortgage meltdown, has loosened requirements for such loans and it’s Businessweek’s contention that this is where many of the predatory lenders have moved toward.

Businessweek’s article covers one such lender, a company called Premier which, after filing for bankruptcy protection in the wake of federal indictments in 2007, has issued more than 2,000 taxpayer-insured FHA mortgages – $250 million in total.

Apparently, Premier failed to notify the FHA of its bankruptcy filing, which is required by law, but once again, existing regulations are not being followed up on, leaving the bill in the taxpayers lap.

Read the original article here.

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