Some private mortgage insurers who have been regaining market share lost to the Federal Housing Administration during the downturn could soon be forced to implement price increases in order to meet risk-based standards proposed by Fannie Mae and Freddie Mac’s federal regulator. Those price increases would not only make the companies less competitive with FHA, but private companies that are relative newcomers in the space, National Mortgage News reports.

Homebuyers taking out mortgages guaranteed by Fannie or Freddie are required to buy private mortgage insurance if they are making down payments of less than 20 percent. The Federal Housing Finance Agency proposes conducting risk-based evaluations of private mortgage insurers’ portfolios, to make sure that each has enough capital to pay claims “under a scenario of significant market stress.”

Established companies like MGIC and Radian say that if adopted as proposed, the new rules will force them to raise premiums or concentrate on serving borrowers at the high end of the credit score spectrum. Newcomers Essent and National MI, which insure fewer risky loans, support the standards as proposed. Source: nationalmortgagenews.com.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×