The FDIC Also Gums Up Housing Market

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Writes Rick Fisk:

Turns out that the FDIC has been offering “stop loss” guarantees on foreclosures, which has in turn prevented short sales from completing (screwing the home owner of course). What this means is that the FDIC, rather than “insuring” deposits, is covering the losses on bad loans. There is a terrific blog post about it here. That post even has a link to the actual stop loss agreements on the FDIC’s website. I haven’t seen any coverage on this in the mainstream.

3:05 pm on September 29, 2009