When you can’t pay, you can’t pay.  It doesn’t matter who lent you the money.  The Federal Housing Administration, part of HUD, could soon be facing the same problems that the subprime commercial lenders are dealing with, according to a story by Neil Roland of Bloomberg News.  The FHA is looking to reduce barriers for lower- and middle-income borrowers to buy homes, and would make it easier for borrowers to receive FHA mortgage insurance.  This might induce commercial lenders to arrange mortgages, but the new rules would not assure sufficient “oversight of lenders, appraisers, and lawyers” involved in clearing these loans.   Thus insured, lenders might take on loans without checking carefully whether the borrowers would be able to meet their monthly payments.  Roland notes that from 1999 to 2006, the FHA lost nearly 10% of the total home financing market.  Is this the FHA’s effort to regain lost market share?  We thought the key issue was setting up loans that were safe for the lender and the borrower – where the borrower could handle the monthly payment.  And this time, defaulted mortgages would be the responsibility not of the banks that took them on, but of the U.S. taxpayer.