FBR: Takeover Won't Hurt MIs in Short Term

An analyst's report issued by Friedman Billings Ramsey says putting Fannie Mae and Freddie Mac into government conservatorship would have little impact on the private mortgage insurance companies in the near term. "Longer-term risks remain, however, as the very real possibility exists that [Sunday's] actions could make the use of mortgage insurance an obsolete form of credit enhancement," said FBR analyst Steve Stelmach. "While nothing currently exists on the legislative front with regard to doing away with the 20% down payment requirement for the GSEs, any upcoming changes to the GSEs' charters resulting from [Sunday's] actions could include legislation that forgoes the need for mortgage insurance." Radian Group Inc., Philadelphia, issued a statement saying it would continue to insure loans for Fannie and Freddie in accordance with their charters. "Fannie Mae and Freddie Mac have historically relied heavily on mortgage insurance, and Radian has been working closely with both companies through this difficult environment," Radian said. "Radian remains committed to its principal mortgage insurance subsidiary, Radian Guaranty." FBR can be found online at http://www.fbr.com, and Radian can be found at http://www.radianmi.com.