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Tuesday, June 28, 2011

Private Mortgage Insurance (PMI) is in financial trouble.

This is a long article, but a friend wanted me to post it.  It's states that the current big three companies that exclusive underwrite PMI are in trouble.  However, it say if other companies will replacement them if no longer could write insurance.

The next domino likely to topple is the so-called private-mortgage-insurance industry, which permits buyers to purchase homes without making a full 20% down payment. Private mortgage insurance covers the first 25% of a mortgage's value against default, plus accrued interest. Some $700 billion of U.S. mortgages carry such insurance, with most of it owned by Fannie Mae and Freddie Mac and backed by the federal government.
The most at risk are the three companies that specialize almost exclusively in the coverage: MGIC Investment (NYSE: MTG - News), Radian Group (NYSE: RDN - News) and PMI Group (NYSE: PMI - News). The other chief participants in the industry—Genworth, United Guaranty and Republic Mortgage Insurance—have the distinct advantage of having corporate parents with diversified business lines and more financial resources with which to buttress their businesses
Read it all

3 comments:

  1. You need to consider in advance exactly what you want and how much insurance cover you need, If you want To find the best online insurance.

    orange county insurance

    ReplyDelete
  2. Hi,

    Private Mortgage Insurance also known as mortgage guaranty is an insurance policy which compensates lenders or investors for losses due to the default of a mortgage loan. It is usually required by lenders if a borrower purchase a property with less than 20% down. Thanks a lot...

    Buyer Mortgages

    ReplyDelete
  3. It may be trouble but homeowners really have to go for it if they don't have any choice. Anyway I heard it's a tax deductible. How is that?

    Please visit me at How Much Is PMI In California

    ReplyDelete