If you thought the housing crisis was over, think again. According to a groundbreaking analysis of the Federal Housing Administration by Edward Pinto, resident fellow at the American Enterprise Institute, FHA’s economic value was minus $15 billion last month. And instead of fulfilling its purported mission to help local residents achieve the American Dream, FHA’s misguided policies “are destroying wealth in low-wealth neighborhoods” — including those in and around Washington.

“Nightmare at FHA” is a devastating critique of a federal agency that abandoned the sound underwriting policies it developed when it was founded in 1934, during the Great Depression. FHA’s foreclosure rate shot up in the ’60s when it started relying on compound leverage, low down payments and unearned equity to qualify borrowers. Pinto found that an estimated 40 percent of all FHA loans now contain at least one or two subprime components: “a FICO score below 660 or a debt ratio greater than or equal to 50 percent (based on loans insured during FY 2012).”