Real Estate News with Terri Taydus, GRI, CNA

PMI Mortgage Insurance, In Danger?

August 21st, 2011 10:28 PM by Taydus Taydus

I have blogged in the past about the seriousness of the QRM
(Qualified Residential Mortgage) and how, if passed, it would require a 20%
down payment in order to purchase a home.
Although I typically like to blog a positive light on the real estate
industry, I feel that this topic is of great importance as it affects all of us
and needs to be shared.

Please take some time to read the below post by Joe Taydus –
Bank of Commerce Mortgage. I have also included a link (below) entitled “PMI Mortgage Insurance Is Closing Its Doors.”

www.activerain.com/blogsview/2466515/pmi-mortgage

THE END OF THE BUYER’S ABILITY TO PUT LESS THAN 20% DOWN?

Written by Joe Taydus – Bank of Commerce Mortgage

While some legislators are trying to kill the housing industry by requiring a minimum of 20% down, there is another force at work that may result in the same outcome.

Recent regulatory decisions are impacting MI (mortgage insurance) companies’ ability to stay in business. On Friday PMI, the premier MI company announced that effective immediately they would stop writing new commitments.

PMI is the third MI company to cease operation since the mortgage crisis began. This is a terrible precedent and what it means is if there are no MI companies left to insure loans borrowers will have no option but to do FHA loans (for the time being), do a blended mortgage or put down the minimum of 20%.

AIG received an $85 billion dollar bailout in September 2008 from the US government. AIG’s mortgage insurance unit, United Guaranty lost over $4 billion dollars in 2008 and 2009.

The MI industry is in a very precarious position and if it cannot survive it will could a devastating impact on the housing market.


Posted by Taydus Taydus on August 21st, 2011 10:28 PM

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