If housing prices fall in 2012 the way they did in 2011, taxpayers might have to pour billions into the Federal Housing Administration (FHA), according to the Government Accountability Office (GAO), to bail out the world’s largest mortgage insurer.

“[A] weakening in the performance of FHA-insured loans has heightened the possibility that FHA could require additional funds to help cover its costs on insurance issued to date,” Mathew J. Scirè, GAO director of Financial Markets and Community Investments, told the House Committee on Financial Services. “If house prices were to decline in 2012 by an amount rivaling that of 2011, [FHA] loans would not be expected to generate sufficient net receipts to offset any potential decline in value,” he added.