GSE Private Mortgage Insurance Profile

Although Fannie Mae and Freddie Mac securitizations dropped significantly in the fourth quarter of 2013, the share that carried private mortgage insurance continued to increase, rising to 23.8 percent in the most recent quarter. As recently as 2Q13, private MI covered just 16.6 percent of GSE securitized mortgages.

In the quarterly report, GSE Private Mortgage Insurance Profile, Inside Mortgage Finance looks at the details of this business: what volume of PMI-covered loans each lender sold, what the loan-to-value ratios were, how much of the lender’s GSE sales had PMI coverage, what channel the loans originated in, and which GSE the loans were sold to.

In the report, you’ll find charts

  • Ranking the lenders by volume of loans with private mortgage insurance,

  • Ranking the lenders by volume of loans originated in the broker or retail channels with private mortgage insurance, and

  • Ranking states where PMI-insured loans were originated.

For the first two charts, an alphabetical listing is also provided in the PDF/print edition.

The data in this report will help you learn who is using private mortgage insurance, how heavily they are relying on it for their GSE business, and what the characteristics are of the typical loan that they are insuring.

You would learn from the 4Q13 report that:

  • Half of the loans Lake Michigan Credit Union (ranked 53rd in volume of PMI-covered loans delivered to the GSEs in the fourth quarter) and DHI Mortgage (#61) sold to the government-sponsored enterprises in the fourth quarter of 2013 carried private mortgage insurance. And while both lenders primarily sold their loans to Fannie, DHI’s were entirely sourced from the retail channel while 45 percent of those from Lake Michigan CU originated with correspondents.

  • Two-thirds of the loans carrying private MI and generated through the retail or broker channels were for the purchase of a home, which is part of the reason that more GSE securitizations are carrying PMI as the market moves away from a refinance-dominant state. But at Lenox Financial Mortgage, 71.3 percent of the 4Q loans were for refis. The loans also carried higher loan-to-value ratios than the average, with 22.7 percent falling above 105 and 17.2 percent between 97 and 105. (The averages for all sellers were 9.1 percent and 4.0 percent, respectively.)

  • While California remained the largest market for PMI-covered loans in total volume, it also left the most room for growth. Only 12.5 percent of GSE securitized loans from California carried private MI, the least of any state.

Order an annual subscription today and download the current quarterly report (4Q13) immediately. You’ll receive the next three quarters by email as soon as they are published.

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With originations expected to drop in 2018, will your shop turn to non-QM/non-prime mortgage products as a way to bolster volumes?

Yes, definitely. We’re planning a launch.
No. It’s still difficult compliance/regulatory-wise.
Maybe. It’s under consideration.
Not now. But things could change as 2018 progresses.

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