US to take steps to fill FHA capital hole
Agencies: Washington, Nov 16 2012, 11:04 IST
The Obama administration said on Thursday it planned to take steps to fill a capital hole at the Federal Housing Administration to lessen the need for a taxpayer bailout.
The Department of Housing and Urban Development said an independent actuary had found that the mortgage insurance agency's capital reserve ratio - a gauge of its buffer against loan losses - had fallen into negative territory and represented a negative economic value of $16.3 billion.
It said the actuary's estimates had not taken into account $11 billion in expected capital accumulation and steps the administration planned to outline on Friday to shore up the agency, which insures one out of three U.S. mortgages.
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