Fannie Mae Approves Four New Mortgage Insurers
Fannie Mae (FNM) approved four new mortgage insurers for conventional first mortgage loans, according to a letter sent to lenders. With the new approvals, Fannie is ready to accept loans with mortgage insurance from Essent Guranty, MGIC Indemnity Corp., PMI Mortgage Assurance Co. (PMAC) and Republic Mortgage Insurance Company of North Carolina. Each insurer is approved in a limited number of states, which is subject to change. Another government-sponsored enterprise Freddie Mac (FRE) anticipates accepting business from Essent in April 1, 2010, according to an announcement from Essent. “The GSEs' approvals officially launch our entry into the mortgage insurance business and enable us to begin supporting qualified borrowers," said Mark Casale, president and CEO of Essent. "We've heard from lenders, borrowers and state regulators that there is a real need for a strong, new mortgage insurance company, and we're pleased to support this critical segment of the housing finance market.” The new additions total 14 approved mortgage insurers with Fannie Mae, according to the GSE. MGIC Indemnity Corp. is a subsidiary of MGIC Investment Corp. (MTG). The Office of the Commissioner of Insurance (OCI) in Wisconsin waived until Dec. 31, 2011 a requirement that the company maintain a certain minimum regulatory capital to write new mortgage guaranty policies. MGIC planned to continue to write new business partly through MGIC Indemnity, which was capitalized with $200m. The PMI Group (PMI) formed PMAC to write new business in cases where another branch, PMI Mortgage Insurance Co. cannot. PMI expects PMAC to hold about $28m in capital. Write to Jon Prior.