4-22-2013: The CFPB fined the top 4 mortgage insurance companies (Genworth Financial, MGIC Investment Corp, Radian Group, and American International Group) a total of $15.4 million for kickbacks to lenders to gain business. Lenders normally select the mortgage insurance provider. Rates may be competitive, but kickbacks are illegal under RESPA and other Federal laws. Source: Wall Street Journal, Friday April 5, 2013, page C3.
3-20-2013: Apparently their future looks brighter, at least for this year, as FHA has warned it can meet it’s insurance obligations without borrowing >$15B from US Treasury. But since Fannie & Freddie look in better shape, I don’t know how long the GSEs will operate under the GSE umbrella or be sold to the private sector. Source: http://www.bloomberg.com/news/2013-03-07/fha-pullback-boosts-mortgage-insurers-once-seen-failing.html
11-13-12: Can mortgage premiums increase? Somebody’s rate went up 500%?http://www.ourbroker.com/news/real-estate-premiums-rise-11-12-12/
11-5-12: Well, kind of a mixed bag for the major insurers depending on when you see the loss payouts (i.e., bleeding) coming to an end for Radian Group (RDN); Genworth Financial (GNW); Old Republic International (ORI); and MGIC Investment Corp (MTG). Source: http://www.thestreet.com/story/11755569/1/mortgage-insurer-comeback-still-tentative.html
I think they are recovering – but don’t know…More than 50% of the loans issued are either FHA insured or those without mortgage insurance.
Back in 10/2007, the WSJ reported that mortgage insurers were covering lot of home loan losses and getting hit pretty hard with losses/payouts.
MGIC Investment Corp reported a net loss of $372 million and likely be 2009 before it became profitable (like it wasn’t before and won’t charge extra in the future, right..)
Old Republic International was planning to get hit too. In fact, seven of the largest mortgage insurers (including PMI Group, Radian Group, and Triad Guaranty Inc.) were to report losses on loans up to 35% of the loan’s value.
Note: The WSJ article mentioned the housing downturn would bottom out in 3Q08…I guess that’s why they call it “a guess”.
Update 8-11-10: MGIC posted its first profit in 12 quarters last month as the cost of claims declined.
Oh, and here’s an interesting twist – even if your lender doesn’t file a deficiency judgment, maybe the mortgage insurance company will – see this article.
Check out more information about deficiency judgment in each state at http://www.foreclosurefish.com/blog/index.php?id=994