You have a few things confused here. The FHA will not be purchasing any existing loans or even making new loans, they will be insuring loans. So their exposure is limited to losses on those new loans, only to the extent of the difference between the new loan balances and the liquidation values on those new loans which end going to trustee sales. The fees, which will be paid both by the old lenders, new lenders (which may be different) and borrowers should be sufficient to cover the losses. There will be no “built in” losses to be borne by the FHA, which you seem to imply. Those losses will be borne by the original lenders.
Additionally, the biggest fallacy in this plan is the CBO’s estimate that 400,000 distressed borrowers may be able to benefit. I suspect that estimate is off by at least an order of magnitude.
