MGIC Adjusting to Compete with FHA Loans
ByFixed rate refinancing remains in high demand for homeowners who have an adjustable rate mortgage, but have not been able to qualify to refinance because their home is worth less than the their mortgage balance. Reuters reported last week that MGIC Investment Corp who is the largest home mortgage insurer in the United States, reduced its premium rates in an effort to recapture market share lost to FHA loans insured by the Federal Housing Administration. FHA mortgage rates have remained competitive with conventional interest rates since 2007.
The low mortgages rates have been available to consumers with high credit scores. Higher interest rates will be offered to borrowers with lower credit scores under the new pricing system. According to mortgage advisor, Sandy Sarconi, “MGIC may be too late reacting to FHA because they have taken 30% of the market-share.”
Presently, FHA loan guidelines do not consider credit scores when pricing its insurance for FHA mortgage loans. The new prices will be effective May 1, the company said. In January, MGIC reported its tenth straight quarterly loss because of increasing delinquencies. More and more homeowners are failing to make their mortgage loan payment on time. The company did make a statement that they anticipate home loan delinquencies to reduce towards the end of 2010.
1 Comments
March 15th, 2010 at 10:23 pm
Thanks very much for informing us on the FHA mortgage lending programs. First time home buyers need loan guidelines to be expanded for credit and down-payment assistance.