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Private mortgage insurance returns to jumbo loans

  • In December, Mortgage Guaranty boosted the maximum mortgage it will insure to $850K from $750K, and Genworth (GNW +0.9%) boosted from $625K to $850K in October. AIG's United Guaranty introduced a limited program for mortgages of up to $1M, and Radian (RDN -0.4%) is considering raising its $850K cap.
  • The moves come as the jumbo mortgage market heats up and the insurers see an opening to grab market share. The companies say small lenders have been contacting them looking for insurance for low down-payment jumbo loans. "We’re making these changes because we sense some level of demand - in the last six months the number of inquiries have increased,” says Genworth's Anthony Guarino.
  • There's also credit profiles: For years, lenders have only been interested in the best borrowers, but are now turning their attention to those further down the trough as the government makes itself less of a presence in the mortgage market.
Comments (9)
  • Abigsoxfan
    , contributor
    Comments (373) | Send Message
    Isn't this the arena which caused AIG to nearly go belly up a few years ago? They do know that next time they blow it up there won't be a bailout, don't they?
    31 Dec 2013, 12:08 PM Reply Like
  • Ardill
    , contributor
    Comments (3) | Send Message
    Simply no. AIG had insured CDS against mortgage backed securities created and rated by others. now they are in the game with their companies. I don't think AIG carries the same risk as it was carrying 6 years ago.
    31 Dec 2013, 09:07 PM Reply Like
  • Matthew Mazurczak
    , contributor
    Comments (827) | Send Message
    @Abigsoxfan how did those AIG puts you bought go? I bet you lost your ass. LOL
    1 Jan, 10:05 AM Reply Like
  • adenovir
    , contributor
    Comments (32) | Send Message
    For years after a bubble, everyone looks for a repeat in the same space and it never happens. The bubble occurs elsewhere where no one else expects it. (Disclosure: Long GNW).
    2 Jan, 02:23 PM Reply Like
  • jmjjmj1
    , contributor
    Comments (145) | Send Message
    Sure there won't be a bail out next time, sure.
    31 Dec 2013, 12:10 PM Reply Like
  • Brucejfern
    , contributor
    Comments (1198) | Send Message
    Come on everybody many of these loans have legitimate skin in the game by the buyers and real, accountable, documented income, etc. I did 20% down and I went through more pain to get my loan that I did in 1983 when I put 20% down. The lending standards are so much higher and the amount of checks and balances up to the day before closing when the mortgage issuer went into my bank account to ask about two last minute deposits even though I had my 20% deposited into escrow prior to those two deposits meaning they should have no meaning to the lender... but they did their due diligence because the FED is watching closely and they wanted to jettison my loan to Fannie ASAP which they did.


    I own AIG and I know they will get it right this time and it is OK to insure homes one at a time. AIG got into trouble insuring global three-letter acronym instruments that came apart.... AIGers will be OK and this is a great source of revenue for insurers.
    31 Dec 2013, 01:30 PM Reply Like
  • artel
    , contributor
    Comments (45) | Send Message
    you are always say something negative!just check your posts it becomes so obvious you are a looserrrrrrrr!
    31 Dec 2013, 05:31 PM Reply Like
  • jester Kane
    , contributor
    Comment (1) | Send Message
    And Fannie and Freddie have been successfully wound down too, right?!?


    Private capital taking risks...
    31 Dec 2013, 09:20 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (7796) | Send Message
    I wish AIG had been allowed to buy (RDN) in 2011!
    1 Jan, 09:38 AM Reply Like
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