U.S. policymakers are studying the Canadian mortgage market, which endured a far less costly downturn during the economic recession, for ideas that could be imported in the reform of the domestic mortgage finance system. “We must find characteristics in other countries similar to our own system,” said Rep. Carolyn McCarthy, D-NY, during a hearing in the House Financial Services Subcommittee on International Monetary Policy and Trade this week. In many ways, the U.S. mortgage market is unique. The ubiquity of the 30-year fixed-rate mortgage, a standard mortgage product here, is unparalleled elsewhere. While a 30-year...

The strongest mortgage insurers benefit the most if the Federal Housing Finance Agency follows through on recent comments that it is considering expanding use of MI as one of a number of potential risk sharing strategies for the government-sponsored enterprises, according to a recent report by Moody’s Investors Service. Moody’s noted that uncertainty about the role of private MI in a post-GSE environment “remains a key credit concern” for the industry. “If the FHFA opted for an increase in mortgage insurance as a way to share risk, even as the GSE mortgage universe shrinks, the action would likely to be a...

In a not unexpected development, PMI Mortgage Insurance has become the second mortgage insurer in less than a month to be suspended by Fannie Mae and Freddie Mac as an approved GSE mortgage insurer after the company announced state regulators placed PMI under a supervisory order.Mortgages insured by PMI Mortgage Insurance or its affiliates PMI Mortgage Insurance Co. (MIC) and PMI Insurance Co. (PIC) with notes before May 19, 2011, or after Sept. 16, 2011, will no longer be purchased or securitized by Fannie or Freddie, the GSEs announced separately last week.

Fannie Mae and Freddie Mac last week both “de-listed” PMI Mortgage Insurance Co. as an eligible private MI, a further blow to a private MI business that has been driven to the brink by the housing market collapse. Republic Mortgage Insurance Corp. was forced to stop writing new business this week as North Carolina regulators declined to extend a waiver of risk-capital ratios under which it had remained in the market. Together, PMI and RMIC accounted...

The National Association of Realtors is backing legislation Rep. Karen Bass, D-CA, is planning to introduce next month, which would provide incentives to first-time FHA homebuyers who obtain housing counseling. The measure is being drafted and will be introduced after Congress returns from its August recess, according to a Bass spokesperson. The bill would provide a reduction in the upfront mortgage insurance premium for FHA borrowers who get pre-purchase counseling. “The irresponsible and abusive lending practices that lead to our financial crisis hurt millions of American families, and continue to impact our nation’s economy,” said Ron Phipps, NAR president. “Housing counseling and consumer education can help ...

A federal district court in Dallas dismissed a civil lawsuit against the Department of Housing and Urban Development and HUD Secretary Shaun Donovan because the plaintiff, a mortgage lender and servicer, lacked standing to bring suit. U.S. District Court Judge Barbara Lynn for the Northern District of Texas, however, gave American Home Mortgage Servicing, Inc. (AHMSI) another opportunity to amend and refile its complaint. Ruling against AHMSI on standing, Lynn never got to the core of the complaint, which accused HUD of failing to pay insurance claims submitted by AHMSI on 161 defaulted FHA-insured mortgage loans, which it serviced. AHMSI claimed...

Private mortgage insurers took heavy losses during the second quarter of 2011 but managed to recover some market share that had been lost earlier in the year to the FHA, according to a new analysis and ranking by Inside Mortgage Finance. Overall, mortgage lenders originated $82.70 billion of home loans with primary mortgage insurance coverage during the second quarter, down 11.6 percent from the first three months of the year. That was measurably better than the 18.5 percent sag in total mortgage originations, however, and it lifted the primary MI share of new business to ... [contains four data charts]

Struggling with a run of huge losses well into its fifth year, Fannie Mae and Freddie Mac now confront the added challenge of worsening financial condition among private mortgage insurers, one of the few backstops the government-sponsored enterprises have to offset some of their losses. Fannie noted in its 10-Q filing with the Securities and Exchange Commission that the “current weakened condition” of its mortgage insurer counterparties has created “an increased risk that the insurers will fail to fulfill their obligations” to reimburse the GSE for its ...

Two Harbors Investment Corp. said this week it is “impressed with the investment opportunities” in the non-agency MBS sector, particularly over the next year and beyond and is pushing forward with its plans to begin a securitization program. Thomas Siering, president and CEO of the New York-based real estate investment trust, said during a conference call to discuss the firm’s second quarter earnings that despite the “challenging” non-agency environment in June, there is tremendous opportunity to profit from non-agency MBS issuance throughout the rest of this year into 2012. “The recent pullback in the non-agency market has created...

The private mortgage insurance industry is trying to preserve its viability in the mortgage world that has thrashed its financial health, urging regulators to expand the definition of a qualified residential mortgage to include loans that are privately insured. According to an analysis done by Milliman, Inc., an actuarial and insurance consulting firm, on behalf of the Mortgage Insurance Companies of America, private MI is a controlling factor that mitigates the risk of default, particularly in ...