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The End of PMI.....Soon All Conventional Mortgages Will Require 20% Down

By
Mortgage and Lending with Guaranteed Rate NMLS# 2611 NMLS #151088

Is the end of Private Mortgage Insurance for conventional mortgages near?  The question begs to be answered after recent events of the last few weeks. 

On Friday, the New York Stock Exchange delisted The PMI Group, Inc.  Later in the day, they were informed that August 19, 2011 was their last day to issue new MI policies. 

This comes after the August 3, 2011 announcement from Republic Mortgage Insurance Company (RMIC) that they will cease issues new MI policies on August 31, 2011.   That is after Fannie Mae announced on July 27, 2011 that they would no longer purchase any mortgages with MI issued by RMIC.  Freddie Mac following suit on August 2nd. 

Triad Guaranty Insurance Corporation ceased writing new MI policies on July 15, 2008. There are only a handful of mortgage insurance companies that issue MI for conventional mortgages.  This is now three that are no longer writing new policed. 

With the recent changes, Genworth Financial, MGIC, Radian, and United Guaranty are now the primary remaining players in the MI market.  Since all conventional mortgages with less than 20% down require MI, that may lead to fewer qualified buyers.  Each MI company sets its own underwriting guidelines and they can be more restrictive than Fannie Mae/Freddie Mac requirements. 

All of this will ultimately lead to making it more difficult for conventional borrowers to obtain a mortgages with less than 20% down.  This will be of greater impact to borrowers who do not have FHA or other financing options.

 

 

 

 

 

 

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It is always advisable to consult with a knowledgeable lending professional when navigating today's turbulent mortgage and real estate marketplace.  I am committed, qualified and equipped to help you evaluate your options!

 

Also check out:

Conventional Financing Mortgage Program Overview/Updates

FHA Financing Mortgage Program Overview/Updates

USDA Financing Mortgage Program Updates  

 

Programs Include:

 

  • Conventional (Fannie Mae & Freddie Mac)

  • FHA, USDA, & VA

  • Jumbo to $3,000,000

  • Bank Statement Program for Self-Employed Borrowers

  • Foreign National Program

  • Investor Cash Flow

  • Non-Warrantable Condos

  • Renovation - FHA 203(k), Fannie Mae HomeStyle Renovation, & VA Renovation

 

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  • Rodney Mason is a Licensed Branch Manager located in Atlanta, GA.   He can be reached at (404) 591-2453.
  • Providing financing for all cities across Georgia including: Acworth, Albany, Alpharetta, Athens, Atlanta, Augusta, Austell, Avondale Estates, Blairsville, Bloomingdale, Blue Ridge, Bogart, Brunswick, Buckhead, Buford, Canton, Carrollton, Cartersville, Chatsworth, Clayton, College Park, Columbus, Commerce, Conyers, Covington, Cumming, Dahlonega,  Dacula, Dalton, Dawsonville, Decatur, Doraville, Douglasville, Duluth, Dunwoody, East Point, Fayetteville, Flowery Branch, Gainesville, Greensboro, Hampton,  Hapeville, Hinesville, Hiram, Jackson, Jefferson, Jonesboro, Kennesaw, Lagrange, Lawrenceville, Lilburn, Lithia Springs, Macon, Madison, Metter, Morganton, Morrow, Newnan, Norcross, Oakwood, Peachtree City, Pooler, Richmond Hill, Riverdale, Rome, Roswell, Sandy Springs, Savannah, Scottdale, Statesboro, Stockbridge, Stone Mountain, St Marys, Sugar Hill, Suwanee, Thomasville, Thunderbolt, Tucker, Tybee Island, Valdosta, Waleska, Warner Robins, Waycross, Wilmington Island, Winder, Woodstock, and many more.

    Providing financing for all cities across Alabama including:
    Alabama Port, Anniston, Athens, Auburn, Bessemer, Birmingham, Boaz, Bridgeport, Cedar Bluff, Chickasaw, Clayton, Coden, Dauphin Island, Decatur, Dothan, Eufaula, Fairfield, Fairhope, Florence, Foley, Forestdale, Fort Morgan, Fort Payne,Gasden, Grand Bay, Gulf Shores, Heron Bay, Homewood, Hoover, Jasper, Josephine, Madison, Meadowbrook, Midfield, Mobile, Mon Louis, New Hope, Orange Beach, Oxford, Oyster Bay, Phenix City, Prichard, Rainbow City, Saraland, Satsuma, Scottsboro, Selma, Troy, Theodore, Tillmans Corner, Trussville, Tuscaloosa, Vestavia Hills, Warrior and many more.

  •  
  • Providing financing for all cities across Florida including: Altamonte Springs, Atlantic Beach, Boca Raton, Bradenton, Cape Coral, Clearwater, Coral Springs, Daytona Beach, Delray Beach, Destin, Fort Lauderdale, Fort Myers, Fort Walton Beach, Gainesville, Hollywood, Homestead, Jacksonville, Jupiter, Key Largo, Key West, Lake City, Largo, Marathon, Mexico Beach, Miami, Naples, New Smyra Beach, Ocala, Orlando, Palm Coast, Panama City Beach, Pensacola, Pompano Beach, Port St Joe, Sanibel Island, Sanford, Sarasota, St Augustine, St Petersburg, Tallahassee, Tampa, Vero Beach, West Palm Beach, & Winter Park, and many more.

 

  • Providing financing for all cities across South Carolina including: Aiken, Anderson, Beaufort, Bluffton, Charleston, Columbia, Conway, Edisto Island, Florence, Greenville, Hilton Head, Johns Island, Myrtle Beach, North Augusta, Orangeburg, Rock, Hill, Spartanburg, Sullivans Island, Summerville, and many more.  
  •   

    Providing financing for all cities across Tennessee including: Athens, Brentwood, Bristol, Chattanooga, Clarksville, Cleveland, Cookeville, Dyersburg, Franklin, Gatlinburg, Greeneville, Johnson City, Kingsport, Knoxville, Maryville, Memphis, Morristown, Murfreesboro, Nashville, Newport, Oak Ridge, Pigeon Forge, Sevierville, and many more

 

All mortgage lending guidelines are accurate at time of post, but are subject to change without notice.  Please call for the most current information.

    

           

Comments (6)

Paddy Deighan MBA JD PhD
http://www.medicalandspaconsulting.com - Vail, CO
Paddy Deighan J.D. Ph.D

great points and very concerning since most people cannot afford a 20% down payment. Great blog on an important topic...

Aug 21, 2011 12:11 PM
Rodney Mason, VP of Mtg Lending
Guaranteed Rate NMLS# 2611 - Atlanta, GA
AL,AR,AZ,CA,CO,FL,GA,IN,MI,MS,NC,SC,TN,TX,VA,WA

Thanks Paddy....It is an important topic for today's buyers and sellers.  Should anything happen to any of the other MI companies, it will be even more of an impact.

Aug 21, 2011 12:21 PM
Gail Robinson
William Raveis Real Estate - Southport, CT
CRS, GRI, e-PRO Fairfield County, CT

Rodney - What are the differences in qualifying for an FHA vs. a conventional mortgage?  I'm a listing agent and I don't see many buyers getting FHA mortgages.  Are they harder to obtain?

Aug 21, 2011 01:17 PM
Rodney Mason, VP of Mtg Lending
Guaranteed Rate NMLS# 2611 - Atlanta, GA
AL,AR,AZ,CA,CO,FL,GA,IN,MI,MS,NC,SC,TN,TX,VA,WA

Gail....FHA mortgages are very common in the Atlanta market.  It may be that the FHA loan limits are too low for some of the homes in your market.  The maximum conformign loan limit is $417K across the continental US.  Some areas have temporary higher limits in place.  In metro Atlanta MSA, the FHA loan limit is $320,850.  That is a big differnece.

Aug 21, 2011 02:16 PM
Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

Rodney very interesting point.  This could lead to even fewer homes selling because 20 percent down is a struggle for many.

Aug 21, 2011 02:40 PM
Rodney Mason, VP of Mtg Lending
Guaranteed Rate NMLS# 2611 - Atlanta, GA
AL,AR,AZ,CA,CO,FL,GA,IN,MI,MS,NC,SC,TN,TX,VA,WA

Jennifer.....This will impact some of the buyer where FHA isn't an option.

Aug 21, 2011 03:50 PM