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U.S. says to take steps to fill FHA capital hole, avoid bailout
November 16, 2012 / 3:05 AM / in 5 years

U.S. says to take steps to fill FHA capital hole, avoid bailout

WASHINGTON, Nov 15 (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.

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