The FHA default rate at the end of 2009 came in 9.1% versus 6.5% the year before.  While most media reports tout a recovering housing market, default rates on loans originated in 2007 and 2008 towards the end of the easy credit period are threatening to unleash another devastating wave of foreclosures.

According to the Washingtong Post, this wave of defaults could bankrupt the FHA for the first time ever - requiring tax payers to pick up the bill.

More from the Washington Post:

Rising FHA default rate foreshadows a crush of foreclosures