U.S. says to take steps to fill FHA capital hole, avoid bailout
WASHINGTON (Reuters) - 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. (Reporting by Timothy Ahmann and Margaret Chadbourn; Editing by Eric Walsh)
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