Private Mortgage Insurance Easier to Obtain

WITH private mortgage insurance considerably tougher to get last year than at any point in decades, many borrowers flocked to loans insured by the Federal Housing Administration.

They had little choice. Lenders typically will not offer mortgages to borrowers with down payments below 20 percent, unless the borrowers get insurance to indemnify the lender in the event of a default. And the federal government was the only entity willing to back many of these borrowers during the housing market slump.

Now private mortgage insurance, or P.M.I., could be making a comeback. Some mortgage insurance companies like Genworth Financial and Radian Guaranty have been easing underwriting standards — sometimes eliminating geographic restrictions, in the case of Genworth, for instance, and offering insurance to some borrowers with down payments of as little as 5 percent.

Rohit Gupta, the chief commercial officer for Genworth’s domestic mortgage insurance business, attributed the relaxed standards to a more stable housing market, along with improved financial conditions for the nation’s major mortgage insurance companies.

Full Article Here – Via NY Times

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