Private mortgage insurers would play a strategic role under a new Senate proposal for winding down Fannie Mae and Freddie Mac and privatizing guarantees on high-quality mortgage securitizations. Introduced by Sen. Johnny Isakson, R-GA, the Mortgage Finance Act of 2011 would create a new regulatory framework for securitizing qualified residential mortgages and an alternative form of guarantee provided by a new Mortgage Finance Agency. Under Isaksons bill, the two government-sponsored enterprises would be placed in a run-off mode by the Federal Housing Finance Agency 18 months from the date of enactment. They would be required to ...
Total FHA endorsements declined 4.2 percent in October from the previous month and 29.7 percent from a year ago even as FHA refinances continued to slow, according to an Inside FHA Lending analysis of FHA data. A total of 88,060 mortgages were endorsed for FHA insurance in October, down from 91,963 loans in September. Of the October endorsements, 60,596 were purchase loans, down 9.0 percent from the previous month and 7.9 percent from the same reporting period last year. FHA refinancing increased 15.4 percent on a month-to-month basis but declined a whopping 57.9 percent from last year. Streamlined FHA refis were ... (Comes with one chart)
Private mortgage insurer PMI Group Inc. circled the wagons last week when it initiated voluntary Chapter 11 bankruptcy protection to protect stakeholders as state regulators move to appoint a receiver for the companys mortgage insurance unit. Headquartered in Walnut Creek, CA, but incorporated in Arizona, the Nov. 23 move to file for bankruptcy protection came one day after a Maricopa County judge rejected PMI Groups bid to overturn the Arizona Department of Insurances seizure of its main unit, PMI Mortgage Insurance Co., in October. As part of the process to...
Private mortgage insurers are moving to adopt policies to fit with the recently expanded Home Affordable Refinance Program offered by Fannie Mae, Freddie Mac and the Federal Housing Finance Agency. Genworth Financial said that its all in, announcing last week that its U.S. mortgage insurance business is making changes so it can fully support HARP 2.0. The upgraded changes to HARP from the two government-sponsored enterprises are designed to enable more underwater borrowers to refinance their residential mortgages at todays record-low interest rates. Genworth says the changes...
The FHA Mutual Mortgage Insurance Fund for single-family loans again fell short of minimum capital standards, spurring renewed warnings of a taxpayer bailout if losses continue to mount. According to FHAs annual report to Congress on its financial status and the condition of the MMI Fund, reserves dropped to 0.24 percent in 2011 from 0.50 percent last year. This means that the agency is holding only $2.6 billion of excess reserves, down from $4.7 billion the year before, against roughly $1.1 trillion of FHA-insured loans. The report also noted that unless housing prices stabilize and losses drop, the fund has a 50 percent chance of a taxpayer bailout. The negative effects in the reports base case scenario were caused by ...
A significant drop in the FHAs Mutual Mortgage Insurance Funds excess capital reserve has renewed calls for a smaller FHA and a limited government role in the mortgage market, even as opponents argued for the agency to remain on track and continue insuring high-quality loans. The annual actuarial report on the condition of the MMI Fund released this week revealed that the funds capital reserves dropped from 0.50 percent at the end of fiscal 2010 to 0.24 percent as of the end of September, the close of the governments 2011 fiscal year. The program is required to have minimum capital reserves of 2.00 percent. The FHA was...
The private mortgage insurance industry, driven toward irrelevance during the first two years of the housing market collapse, is staging a quiet comeback in 2011. A new Inside Mortgage Finance ranking and analysis reveals that private MI activity in the third quarter rebounded to its strongest market share in three years, and accounted for 24.2 percent of new primary mortgage insurance written. While FHA volume dropped 6.2 percent from the second quarter, private MIs provided coverage for $22.01 billion in new mortgages, a gain of 38.6 percent. The increase in private MI activity outstripped...(Includes three data charts)
Fannie Mae and Freddie Mac reported similarly sour earnings results for the third quarter with both government-sponsored enterprises expressing concern about their growing risk exposure to struggling private mortgage insurance companies. Freddie noted in its 10-Q filing that the financial condition of certain of our mortgage insurers continued to deteriorate during the July-September period. Fannie sounded a similar alarm in its own earnings statement. The already weak financial condition of many of our mortgage insurer counterparties deteriorated at...(Includes one data chart)
Despite buying back some $5.4 billion in mortgages during the third quarter of 2011, mortgage lenders made only a small dent in the huge number of unresolved disputes with Fannie Mae and Freddie Mac over representations and warranties. According to third-quarter financial reports from the government-sponsored enterprises, Fannie and Freddie still had a whopping $12.2 billion of outstanding repurchase claims as of the end of September. That was down only slightly from the $12.7 billion in unresolved buybacks at the midway point in the year. The GSEs reported that seller-servicers...(Includes one data chart)
Old Republic International Corp. intends to re-enter the mortgage insurance business with a revamped business risk model, fresh capital and a new subsidiary if it obtains approval from state regulators and its two major policyholders, Fannie Mae and Freddie Mac. The Chicago-based company, which also operates general and title insurance segments, still maintains a long-term strategic interest in mortgage insurance despite the negative trends in the sector, according to company executives during a recent conference call with analysts and investors. But at this point, we have little, if any, idea as to the...