Private mortgage insurance companies may have to meet new standards set by the Federal Housing Finance Agency if they are going to continue to insure loans guaranteed by Fannie Mae and Freddie Mac.
In written testimony, FHFA acting director Edward DeMarco outlines a new initiative related to
“We intend to formulate new mortgage insurance eligibility standards to ensure all insurance carriers doing business with the enterprises have the appropriate financial, operational and management capacity to fulfill their obligations, particularly in the event of additional stress to the housing markets,” DeMarco says in testimony submitted to the Senate Banking Committee. The director is slated to testify Thursday morning.
The FHFA also intends to update mortgage insurance master policies by “clarifying the role and responsibilities of insurance carriers, particularly when servicers pursue loss mitigation to help delinquent borrowers,” according to the written testimony.
