Private MI for 'B' Loans?

United Guaranty Residential Insurance Co., Greensboro, N.C., is testing a new mortgage insurance product for "A-minus" and "B" loans.Two of the nation's largest lenders (which UG would not identify) are participating in the test program, which is designed to work with Fannie Mae's A-minus program. Several private mortgage insurance companies offer MI on A-minus loans, but UG claims it has a more comprehensive plan that will allow lenders to enter the subprime market, where loans are often priced 200-400 basis points higher than conventional product. "It is not just a one-dimensional program that has a small [premium] increase for loans that don't quite fit the 'A' paper market," said Mark Amacher, UG's senior vice president of strategic planning and marketing.