Private mortgage insurers in 2012 posted their best year since the financial market collapse back in 2008 and suddenly – after being largely left as roadkill in the government’s bailout program – are attracting new capital. Private MIs reported $174.81 billion in total new insurance written in 2012, more than doubling the amount of business they did the year before, according to a new Inside Mortgage Finance ranking and analysis. With the FHA and VA programs growing at a more deliberate pace, it boosted the private MI share of the primary mortgage insurance market to 32.0 percent, up from 22.7 percent in 2011. A significant part of the private MI rebound came...[Includes three data charts]

PMI Mortgage Insurance Co. may be out of the mortgage insurance business, but its surviving MI subsidiary, CMG Mortgage Insurance Co., will continue providing MI to credit unions under new management beginning in 2014. Last week, Arch Capital Group, a Bermuda-based provider of insurance and reinsurance, announced an agreement to acquire CMG MI from PMI Mortgage Insurance, as well as the latter’s operating platform and related assets. PMI is currently in rehabilitation and has been under the receivership of the Arizona Department of Insurance since 2011 after failing to meet statutory capital requirements. The transaction will not only allow...

FHA Commissioner Carol Galante fended off attacks by Republicans on the House Financial Services Committee this week, saying that the actual performance of the FHA single-family program over the course of FY 2013 and steps the agency takes during this period will determine whether the agency will need more cash to pay claims. In her first congressional appearance since her Senate confirmation in late December, Galante tried to assure critics that the FHA may not have to borrow from the U.S. Treasury to boost its claims-paying ability if the proposed budget President Obama releases next month does not show a shortfall. In last year’s proposed 2012 budget, the president anticipated...

With the White House budget delayed until sometime in March, there is renewed speculation that the Department of Housing and Urban Development will not ask for a draw from the Treasury Department to bolster the cash-starved Mutual Mortgage Insurance Fund of the FHA. In testimony this week before the House Financial Services Committee FHA Commissioner Carol Galante said underwriting changes and premium hikes have decreased the likelihood that the MMI will request additional cash. But she could not say for certain, noting that if a draw is needed it will not come until the end of fiscal 2013. Mortgage insurance professionals and consulting firms that work on HUD issues have estimated...

A deeply divided House Financial Services Committee took on FHA solvency this week as critics and defenders clashed over the agency’s practices, financial health and future role in the nation’s housing market. The distinctly partisan tone of the hearing quickly raised doubt as to whether the Republican majority and their Democratic opponents can come to some compromise to strengthen the FHA and reduce its risk to taxpayers. Committee Chairman Jeb Hensarling, R-TX, echoed complaints by Republican colleagues that the FHA is ...

An announced 10 basis-point hike in the FHA mortgage insurance premium (MIP) may bolster the health of the FHA Mutual Mortgage Insurance Fund and speed up shrinkage of FHA market share, but it will also make FHA-insured loans costlier for borrowers. The increase is the latest in a series of premium hikes imposed by the Department of Housing and Urban Development in the past three years to strengthen the MMI Fund’s capital reserves, which lately have fallen to a negative position. Simultaneously, HUD announced other measures to ... [1 chart]

The FHA this week has proposed to set a 95 percent maximum loan-to-value ratio for FHA-insured loans over $625,500, effectively raising the minimum downpayment for jumbo loans from 3.5 percent to 5 percent. In a Feb. 6 Federal Register notice, the FHA said the proposed change is aimed at improving the health of the Mutual Mortgage Insurance Fund, whose statutory capital reserve ratio has fallen to a precarious level, raising the specter of a taxpayer bailout. Despite steps taken since 2009 to strengthen the MMIF, actuarial reviews of the fund have projected rising levels ...

Although unhappy about the demise of the popular, fixed-rate, standard Home Equity Conversion Mortgage, loan officers are not worried about any long-term adverse effect on their FHA businesses. In fact, members of the National Reverse Mortgage Lenders Association, support the FHA’s decision, which is a part of a broad effort to strengthen and better manage the risk of the agency’s Mutual Mortgage Insurance Fund. They said they have other HECM products to offer in lieu of the standard HECM loan. Beginning April 1, borrowers who choose a fixed interest rate will be limited to ...

FHA-approved lenders that engage in aggressive marketing to borrowers with a history of foreclosure, particularly advertisements about the ease of obtaining an FHA-insured mortgage after foreclosure, could face potential sanctions and severe penalties, the FHA warned. In a letter to lenders, FHA Commissioner Carol Galante said there has been a proliferation of web-based and print ads conveying the message that almost any borrower can get a new FHA loan three years after ...

A recent revision to the Department of Housing and Urban Development’s Office of the Inspector General Audit Guide has lifted a reporting burden for FHA investing mortgagees who are involved in servicing, according to Phillip Schulman, a top compliance expert and a partner at K&L Gates. Under the revised guide, an investing mortgagee or lender that purchases, sells or holds FHA-insured mortgages but cannot originate or fund FHA loans no longer needs to submit reports on internal controls and compliance, Schulman reported in a client alert. The new rule states that investing mortgagees are now required to ...