Mortgage insurers raise bar

Insurers add that they are pursuing the kind of more disciplined behavior that may have helped avert the housing crisis. "Clearly, the pendulum had swung a little too far in terms of flexibility in underwriting," says Len Sweeney, chief risk officer for AIG United Guaranty, the mortgage-insurance unit of American International Group Inc. "Some of the movement we've made of late is back to a more prudent approach."

Michael Zimmerman, a spokesman for industry leader MGIC Investment Corp., says, "So far, we're only losing the business that we no longer want to write. The long-term objective of anybody in the housing industry should not be just affordability but sustainability. I think for the last few years, the drive and the focus have been solely on affordability."



The WSJ article


This is a map where the insurers have declared the region a declining market. Remember, redlining is illegal in lending. They must paint with a broad brush. So in effect if a region starts to decline, the whole region becomes tougher to buy into.








The article is worth the time to read in its entirety. I recommend an online subscription to the WSJ. Its nothing really that new to the housing bloggers, but it does point to why the market is not going to turn up anytime soon. The #1 reason in the article: Mortgage insurers are making rule changes that will last years. Mostly due to too many of them having to 'wind down' their business.

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Neil