Industry NewsMortgage

FHA premiums should cover losses

Only protracted depression would require taxpayer bailout
Published on Nov 12, 2009

Watch Connect NYC 2017 Live
Tune in live as the best and brightest explain how to execute and grow your business from the main stage of Connect.

The Federal Housing Administration's capital reserve ratio has fallen below statutory minimums, but the government mortgage insurance program will not require a taxpayer bailout unless the economy becomes mired in a depression, officials said.

In releasing the results of an independent actuarial study, Housing Secretary Shaun Donovan and FHA Commissioner David Stevens today said that in the event of a second severe recession, FHA's capital reserves would be wiped out, but premiums from insurance written in coming years would be sufficient to cover losses.

Comments