PMI Cuts Brokers Loose

In what could be another nail in the coffin of the loan brokerage industry, The PMI Group of San Francisco confirmed it will no longer insure any mortgages brought to them by third-party originators unless these firms have a warehouse line of credit. It's believed that PMI is the first of the nation's seven MI firms to totally exclude loan brokers from their coverage menus. In recent months other MIs - including Genworth and MGIC - have tightened guidelines on broker-sourced loans, particularly condominiums and high LTV notes. A PMI spokesman confirmed the new policy change to National Mortgage News adding that, "This does not apply to correspondents." He said PMI would honor any commitments on broker loans in its pipeline. Marc Savitt, president of the National Association of Mortgage Brokers, said he is seeking a meeting with White House officials to discuss issues affecting brokers (including the PMI matter) and believes the sector has been unfairly blamed for the nation's mortgage crisis. "We don't underwrite loans," he said. The NAMB chief believes the nation's largest commercial banks are part of a "well orchestrated campaign" to put brokers out of business and gain market share. In a letter NAMB sent to the White House today he writes: "Make no mistake about it. This campaign to eliminate our profession has absolutely nothing to do with consumer protection. It's about market share."