Private mortgage insurers lock down $3.9 billion in new business in May
Private mortgage insurers, which have been advocating for a place in the future mortgage finance space, wrote $3.92 billion in new mortgage insurance last month, up from nearly $3.7 billion in April. The Mortgage Insurance Companies of America — which represents member firms Genworth Mortgage Insurance, MGIC, PMI Mortgage Insurance, Radian Guaranty and Republic Mortgage Insurance — released data Thursday, revealing mortgage insurers have $610.8 billion in primary mortgage insurance in force, down from $615.7 billion in April. During May, the insurers received 23,810 applications, and more than 20,000 borrowers acquired mortgage insurance when buying or refinancing a home. The industry also reported 44,853 defaults in May, along with 36,159 cures on distressed loans insured by members. The future of the private mortgage insurance business has been the subject of much speculation this year. In the past, private mortgage insurance helped homeowners with less-than-stellar credit to obtain levels of financing that otherwise might not have been extended. In March, regulators proposed a rule requiring lenders retain 5% of the credit risk on loans, including mortgages, that are packaged into securities. The exception is the QRM, which among other standards, must include a 20% down payment from the borrower. MICA continues to advocate for changes to the proposed qualified residential mortgage standard, which members feel leaves out a role for private mortgage insurance when borrowers do not have a 20% down payment. Standard & Poor's warned earlier in the year that the rule as constructed could cut into the industry's business. S&P Credit Analyst Ron Joas, said in a report "as the QRM definition is currently written, mortgage insurance is not included as a credit enhancement." "Absent the GSE exemption, this would significantly limit the loans on which MIs could write mortgage insurance," he said. Write to Kerri Panchuk.