PMI, Once Wildly Profitable, Ordered to Stop Writing Policies
Posted by Jonathan J. Miller -Sunday, October 23, 2011, 10:00 PM
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PMI Group Inc., the mortgage insurer that was ordered in August to stop writing policies, said a unit that sells such coverage was seized by Arizona authorities and will pay out claims at 50 percent starting tomorrow.
Private mortgage insurance provides additional protection to the lender when the borrower pays less than 20% down for a home. The industry was wildly profitable in the years leading up to the housing crash.
My worry is that this becomes another factor that tightens credit further and/or makes borrowing more expensive.
Yet we keep focusing on what isn’t going to solve our housing problem.
