I don't find this to be surprising at all, but it appears that FHA may be in need of a bail-out. Could it be that since FHA's mission to increase access to affordable housing is backfiring? I mean, US home ownership indicates that home ownership reached a high of 69% in 2004, but remains above the historical post-WWII levels. So as the FHA is pushing to expand home ownership into minority and low income populations (see it for yourself on page 8) is it any wonder that they're seeing an increase in delinquencies and foreclosures. There's a direct relationship with the employment (or unemployment) levels for the FHA's target market. Employment statistics for by ethnicity and eduction level (which I associate with income level) would clearly indicate that this is a run-away train.
Check out some additional data on U.S. home ownership here.
I just want to know if Congress will call HUD / FHA leadership to the hill and interrogate their risk management practices. Doubt it.