Sen. Kit Bond warned Thursday that the Federal Housing Administration is a "powder keg" waiting to explode, and said the Congress and the Obama administration shouldn't place a greater financial burden on the already strapped agency.
The taxpayer credit card is maxed out," Bond said at a Senate subcommittee hearing.
"The alarm is sounded – if Congress and the Administration place more risk on FHA before the problems are solved this powder keg could explode and taxpayers will be on the hook," Bond added.
The government reports the number of troubled loans backed by the government is on the rise, however the Department of Housing and Urban Development notes that the FHA is "unlikely to face the catastrophic losses borne in the subprime sector."