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Tess Vigeland: I joked early on in the housing crisis that we should start calling ourselves Marketplace Mortgage. Here we are many moons later and... let's talk mortgage loans! First, the good stuff: Mortgage interest rates are falling again. The average for a zero-year fixed is down to just a scosh over 5 percent. And now the bad stuff: All those terrible, horrible, no good, very bad home loans that some lenders doled out like Tootsie Rolls? This week, federal authorities announced a slew of subpoenas to mortgage companies with high rates of bad loans.

Marketplace's Jeff Tyler has the details.

Jeff Tyler: The folks at Housing and Urban Development, or HUD, are cracking down on mortgage fraud. They want 15 mortgage companies to explain why their loans failed. The government picked up the tab for those bad loans, because they were covered by federal mortgage insurance.

Anthony Sanders is professor of finance at George Mason University.

Anthony Sanders: They have not yet documented that these people have committed any sort of a crime. However, when they see unusually large default rates, they want to know why. And as taxpayers, we should be very happy they're looking into this. My worst fear would be that they didn't.

In the last few years, the Federal Housing Administration, or FHA, has helped prop up the housing industry after subprime lending dried up. It went from backing 3 percent of new home loans to around 30 percent today.

Barry Zigas follows housing issues for the advocacy group Consumer Federation of America. He says that higher volume is harder to police.

Barry Zigas: The Department is extremely worried that they will become the dumping ground for bad loads that might otherwise in the past have gone into the subprime market.

The FHA doesn't actually make loans. Zigas says it insures mortgages, offering the lender protection from failed loans.

Zigas: And that means that if it fails FHA will pay off whoever owns the mortgage.

Historically, the FHA has not had to rely on taxpayers for funding. Stuart Gabriel is professor of finance at UCLA's Anderson School of Management.

Stuart Gabriel: They are self-sustaining based on their insurance fund. They charge their borrowers insurance premia. And those premia are used to defray the cost of default on those small percent of mortgages that go into default.

But, Gabriel says, the number of defaults over the last two years have been climbing.

Gabriel: Today, there are looming and very significant question marks as to whether the insurance fund will be adequate in the near term, because the losses, in terms of default on newly originated FHA-insured mortgages have been so significant.

With so many failed loans, Gabriel says the FHA's solvency is in question.

Gabriel: There is a significant possibility that this particular government program -- for the first time in its history -- will require the taxpayer to write a check.

To protect the FHA, many observers say it must raise mortgage down payments. Traditionally, FHA-backed loans required just 3 percent down. Or less.

Again, George Mason finance professor Anthony Sanders.

Sanders: If you have 3.5 or zero-percent down loans, it can get kind of dangerous out there, because the incentive for fraud increases dramatically.

Sanders and other housing experts suggest raising the down payment as high as 10 percent. That would make it harder for consumers to afford homes. But it would also give them a big enough financial stake in the home to keep them from walking away if the house price falls.

I'm Jeff Tyler for Marketplace Money.