FHA to insure foreclosure buys

The Federal Housing Administration will offer mortgage insurance to buyers of foreclosed homes, a signal that the Bush administration may be ready to expand its intervention as the housing slump deepens.

The FHA, which insures mortgages for low-income and first-time buyers, will waive a 90-day waiting period for insurance on foreclosed property, the agency said.

The one-year policy for foreclosure insurance is a sign that the administration may be easing its opposition to using taxpayer money to rescue lenders and investors.