In a paper entitled "Too Early to Sound the FHA Alarm," the Center for American Progress (CAP) comes to the defense of the Federal Housing Administration (FHA), the troubled federal housing entity. In doing so, CAP sounds eerily similar to Representative Barney Frank's position regarding Fannie Mae and Freddie Mac in 2003: "I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing."

Recall that as late as July 2008, a mere two months before being placed in conservatorship, Fannie and Freddie's regulator found them to be "adequately capitalized, holding capital well in excess of the OFHEO-directed requirement, which exceeds statutory minimums." It was only after the Treasury Department and FHFA (successor agency to the Office of Federal Housing Enterprise Oversight) retained Morgan Stanley to probe the companies' finances that the companies were found to be woefully under-capitalized.

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Edward Pinto is a resident fellow at AEI