Mortgage insurance company losses are a mounting concern for the industry.
A concern that has not received much coverage in the media, nor in Congress. These companies have taken a beating in the market downturn.
Mortgage insurance enables home buyer to purchase with less than a 20% down payment. For FHA loans, the home buyer purchases government mortgage insurance from HUD. For conventional loans, the home buyer purchases private mortgage insurance.
Several companies offer mortgage insurance. All have taken heavy losses and as a result have tightened their lending guidelines. In many cases the MI companies have tightened their guidelines more than Fannie Mae and Freddie Mac have.
In other words, Fannie or Freddie might allow a loan to be, if the borrower can obtain mortgage insurance. But if the mortgage insurance is not availabie, then the loan cannot be made. Even though Fannie and Freddie guidelines would have allowed it.
Mortgage insurance is critical to home affordability and to the housind market.
Mortgage insurance is in trouble.
Standard and Poor's is looking closely at the larger mortgage insurance companies. This look may mean a credit rating downgrade.
The impact - higher premiums, tighter guidelines, less approved loans. It may be that Congress needs to look into what can be done to support this industry that is so vital to the continued housing recovery.
In an earlier post I suggested a twist on the home buyer tax credit that might have provided a boost to the struggling mortgage insurance industry, and might have actually helped create new home buyers. Both of these issues remain unaddressed.
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Richard Smith
NMLS 184479
Cell: 423-280-0345
Toll Free: 888-474-9920
Office: 423-899-6898
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American Acceptance Mortgage, Inc
NMLS 132505, TN/GA Licensee
Email: rsmith@aamonline.com
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FHA, VA, Rural Development, Conventional, Jumbo,
Reverse Mortgages, FHA 203k Renovation
Home financing in Tennessee and Georgia.
www.RichardSmithHomeLoans.com
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Thank you for visiting. This is the professional blog for
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Richard Smith
NMLS# 184479 TN# 40161 GA# 28928
Conventional, FHA, FHA 203k, HUD $100 down purchases, VA, Jumbo VA, Rural Development, Jumbo, FannieMae Homepath, Home Equity Line of Credit (HELOC).
Lending in Chattanooga, Tennessee and Georgia for over 20 years.
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Stearns Lending, Inc
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Cell phone: 423-280-0345 Email: Richard@HomeLoansChattanooga.com
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Visit my website: www.RichardSmithHomeLoans.com To inquiry about a home loan Begin Here
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Read my most recent articles in Scotsman Guide.
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This blog represents the opinions of Richard Smith. The posts and comments written on the blog do not represent the opinions or positions of Stearns Lending, Inc.
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Mmmm. I wonder if MI carriers are repo'd by AIG????
If not, they will probably be looking for some TARP money if there's any left.
This is, indeed, the monster coming over the hill.
Then, there's FHA, VA, USDA, . . . . .