Cooking the books?

When do you accept reality?  Some of us refuse as long as possible, especially if acceptance costs us money.  It looks as though the big banks - Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo (WFC) - might be having a problem accepting the reality that some of their mortgage loans are really not insured by the FHA. They are thought to have $57 billion of seriously delinquent loans that should be in foreclosure.  But, they won't call them that since it would mean that the FHA will no longer cover the losses. They may also be afraid to pull the plug because many of these mortgages may have been issued under fraudulent terms, which, again, is an FHA no-no and would make them subject to fines and other problems.