bobbyw24
11-16-2011, 07:26 AM
An annual audit of the Federal Housing Administration’s (FHA) books has concluded there is a 50-50 chance the government mortgage insurer will need a bailout from taxpayers within the next 12 months.
http://img1-cdn.newser.com/square-image/133362-20111115032919/fha-may-soon-need-its-first-ever-bailout.jpeg
HUD released a report to Congress Tuesday on FHA’s 2011 fiscal year, which ended September 30. It shows the agency’s cash reserves have fallen to $2.6 billion, down from $4.7 billion at the end of FY 2010.
The decline has pushed FHA’s capital reserve ratio further below the legal limit mandated by Congress. It has deteriorated to 0.24 percent. By federal statute, FHA’s capital reserve ratio should be at a minimum of 2 percent. It was 0.50 percent as of last September.
The capital reserve ratio measures FHA’s cash on hand relative to the number of all outstanding mortgages insured by the federal agency. It’s intended to gauge the amount of cash reserves held by the agency beyond what’s needed to cover projected losses from loan defaults.
FHA’s capital reserve ratio has come in below the congressional requirement of 2 percent for three years now. This latest reading of 0.24 percent is the lowest in the agency’s 77-year history.
http://www.dsnews.com/articles/fha-reserves-sink-further-below-legal-limit-amid-talk-of-bailout-2011-11-15
http://img1-cdn.newser.com/square-image/133362-20111115032919/fha-may-soon-need-its-first-ever-bailout.jpeg
HUD released a report to Congress Tuesday on FHA’s 2011 fiscal year, which ended September 30. It shows the agency’s cash reserves have fallen to $2.6 billion, down from $4.7 billion at the end of FY 2010.
The decline has pushed FHA’s capital reserve ratio further below the legal limit mandated by Congress. It has deteriorated to 0.24 percent. By federal statute, FHA’s capital reserve ratio should be at a minimum of 2 percent. It was 0.50 percent as of last September.
The capital reserve ratio measures FHA’s cash on hand relative to the number of all outstanding mortgages insured by the federal agency. It’s intended to gauge the amount of cash reserves held by the agency beyond what’s needed to cover projected losses from loan defaults.
FHA’s capital reserve ratio has come in below the congressional requirement of 2 percent for three years now. This latest reading of 0.24 percent is the lowest in the agency’s 77-year history.
http://www.dsnews.com/articles/fha-reserves-sink-further-below-legal-limit-amid-talk-of-bailout-2011-11-15