Where mortgage insurance went wrong

Lenders' inability to fund their own loans puts housing finance at risk

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Last year, I unwisely committed to writing an article on mortgage insurance for an international encyclopedia. When all too soon it became time to deliver, I realized that the encyclopedia was looking for both a global and historical perspective, neither of which I had. I remedied my ignorance about programs in other countries by mining articles written by Roger Blood, who has consulted on mortgage insurance programs abroad and is an expert's expert on the subject. While mortgage insurance began in the U.S., programs now exist in some 34 countries, according to Blood's count. In 14 countries, the insurance is public; in eight, it is private; in seven (including the U.S.), there are both public and private programs; in four, insurance is offered by a mixed public/private entity; and in one, it is offered by a nonprofit. The historical perspective I needed came from the Aldrich Report, published in 1934 by a commission appointed by the governor of New York State to examine th...