Sooner or later it had to happen. And it has begun.

Not only have the lenders tightened their lending policies, but now, so have the issuers of the least loved orf all industries; Private Mortgage Insurance!

At least one major insurer issued a statement today  they intend to suspend issuing PMI certificates to borrowers with that fall within the folowing guidelines;

"As a result of the performance and recent changes in the industry, it is necessary to make the following changes for mortgage insurance applications received on or after September 17, 2007

Loans with LTVs greater than 85% with credit scores less than 575 are ineligible for mortgage insurance, regardless of the DU or LP recommendation.

All ARM loans with LTVs greater than 95% with credit scores less than 620 with a first rate adjustment of less than 5 years are ineligible for mortgage insurance (for example, Pay Option ARMs, 1/1 ARMs, and 3/1 ARMs).

Until further notice, we will temporarily suspend insuring all loans with LTVs of 97.01% and greater with DU recommendations of Expanded Approval Level II and III, and DU Refer with Caution."

Keep in mind this is only one company, but rest assured they will ALL be making the same changes otherwise this company intends to intentionally drive themselves out of business, which I dont think is the case.

I spoke with this lender at the Annual Leadership Conference of the MMLA (www.mmla.net) and he tells me they arte paying out claims at a rate of 101%, meaning they are paying out 1% more in claims thean they are collecing in PMI premiums!