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FHA premiums should cover losses

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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.FHA won't require a taxpayer bailout unless the nation enters a protracted economic recession where mortgage rates fall to 2 percent and stay there for three years, the actuarial study found. In that scenario -- which doesn't take into account that FHA would likely see a boost in premiums from refinancings -- taxpayers would have to loan FHA $1.6 billion in 2012 to cover claims.Anticipating that FHA's capital reserve ratio would fall be...