According to a recent report- The PMI companies will soon be dropping like MORTGAGE COMPANIES!
3Q Earnings: PMI's Outlook Unclear; Worst of 2/28 Resets Over
American Banker (10/31/07) P. 13; Terris, Harry
Following the announcement of a $372 million third-quarter loss by rival MGIC Investment Corp. earlier this month, mortgage insurer PMI Group Inc. confirms that it lost $86.8 million during the period after reporting earnings of $104.2 million during the same three months of 2006. The company blames 2/28 hybrid adjustable-rate mortgages and home loans with loan-to-value ratios exceeding 97 percent, but it notes that it decreased the number of 2/28 hybrid ARMs that it covers to zero in 2007 from 6,300 in 2006 and 27,000 in 2005. PMI says captive reinsurance arrangements that require lenders to shoulder losses on loan pools after a particular threshold is reached and loan modifications would improve its bottom line. Additionally, PMI Chief Executive L. Stephen Smith says loans originated in the third quarter of this year were made using stricter lending standards than those written earlier in the year.
Yet! These are the SAME COMPANIES that are fighting to withhold H.R. 1852 FHA REFORM! This bill takes away the need for audits, allows vertually all mortgage companies to offer FHA loans - RAISES THE MAXIMUM LIMIT in most areas to an acceptable 125% of the median sales price - it's a GOOD THING for homeowners in NEED of a loan!
Greed. Pure and simple. What a shame. Real Estate Agents, BUILDERS, HOMEOWNERS need FHA reform! FHA needs money for COMPUTERS! Heck - many of the PUD documents in Atlanta are still in FILE CABINETS! Let's bring FHA into the 21st Century!
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