According to Urban Institute, mortgage insurance payouts mean GSE losses on loans with LTVs over 80% are comparable to those on loans with LTVs below 80%.
Will lower FHA premiums steal market share from the GSEs? According to analysts, private mortgage insurer pricing still makes the GSEs the better execution for borrowers with credit scores over 680. But private MIs are still nervous.
By some estimates, the enterprises will have to increase guarantee fees by about 3 basis points to offset the lost revenue from FHFA's targeted elimination of LLPAs.
During a recent congressional hearing, FHFA Director Sandra Thompson said the agency will conduct a 90-year lookback as well as a forward-looking analysis of the FHLBank system.