FHA: No Need for Subsidies to Boost Reserves
Friday, September 18, 2009 9:38 AM
WASHINGTON -- The U.S. Federal Housing Administration said on Friday it would not need a congressional subsidy even if mortgage-related losses push its reserves below a level demanded by Congress.
Rising losses at the FHA, part of the U.S. Department of Housing and Urban Development, raise the possibility its capital reserve ratio could dip below the 2 percent level, and the government might have to support the agency, analysts say.
The Wall Street Journal on Friday reported that government officials believed reserves at the FHA, which provides government guarantees on mortgages for some home buyers, were in danger of breaching the 2 percent mark.
"Even if that level falls below 2 percent, FHA continues to hold more than $30 billion in its reserves today, or more than 5 percent of its insurance in force," FHA Commissioner David Stevens said in a statement. "Given this reserve level, FHA will not need a congressional subsidy even if the congressional capital reserve calculation falls below 2 percent."
So here we go again. Rest of Story link. http://www.moneynews.com/financenews/fha/2009/09/18/261788.html?s=al&promo_code=8944-1