The Real Deal Miami

Mortgage insurance turmoil strains housing market

February 18, 2008 02:37PM

Mortgage insurers have been forced to adopt stricter underwriting
standards, adding yet another layer of uncertainty to the housing
market. A lack of mortgage insurance means some borrowers who struggle
to put together a down payment could have a tougher time buying a home.
Claims on policies that mortgage insurers sold during the boom have hit
hard. MGIC Investment Corp., the largest mortgage insurer in the
country by market share, reported that it posted a $1.47 billion loss
in the fourth quarter. Now, MGIC won’t insure borrowers who won’t put
down at least 5 percent in several major metropolitan areas and in four
states: Arizona, Florida, California and Nevada. The change has already
taken effect in Florida and California.