Spain Elects A Conservative Response To The Debt Crisis

MADRID - The Spanish voters expelled from the Socialist government Sunday's election as a referendum on the management of European debt crisis, which left Spain bowing to the rising unemployment, mounting debt and the reduction of public benefits .

Board of Directors of mortgage insurance 'is becoming dangerously close to the farm is not too much cash for credit losses.

An annual independent actuarial brings the FHA loan loss reserves were 0.24% of its $ 1.1 trillion-dollar mortgage insured.

The FHA, which does not originate loans, but ensures increased from less than 5% market share at the height of the housing boom is now over 30 percent. Accounting measure of FHA's reserve currency by estimating future losses, and these estimates continue to grow at home prices fall and mortgage outstanding still run very high.



FHA reserves are estimated at $ 2.6 billion as on September 30, the report said, down 45% from $ 4.7 billion last year. Congress mandates that the reserves of the FHA must be at least 2% of the total insurance in force, but it was not at that level for some years now. ECA estimates will not be back above that level until 2014, and it would be based on the current book of business.

"Ratings FHA borrowers in 2011 a new record for the average credit score of 700 for the first time," said Carol Galante, FHA, on call for journalists.

Yet, if house prices continue to fall, the FHA would require government support in the form of saving.

The report uses as a base scenario of Moody's Analytics, shows the decline in house prices in 2011 was 5.6%, and a small price increase of 1.3% in 2012.

Other analysts have predicted the fall in prices in 2012, or at least without a flattening of growth. Yet, the auditors say, "According to other estimates, a reduction in domestic prices in 2012 would rival the first 2011 of the first level of support would not be enough."

The FHA, however, may be looking at increased risk, lawmakers vote this week on the restoration of higher loan limits for FHA, but not for Fannie Mae and Freddie Mac limits are reduced from 1 in 600 counties October.

"This is a situation that has never happened before, so it is very difficult for us to make any prediction about how the company will eventually come to find an FHA vs. other private alternatives," said Galante. "We are able to exploit the premium will increase if the economic situation is worse than it is today," he added.