This Market Chart compares the costs and benefits of assorted forms of default insurance demanded by mortgage lenders on loans with LTVs exceeding 80%, and suggests the optimal financing path for homebuyers and their agents.

Updated on November 28, 2011 PMI Group, the nation’s third largest private mortgage insurer, filed for Chapter 11 bankruptcy on November 23, 2011, listing $736 million in debt. In October 2011 the company was seized by the Arizona Department of Insurance which now has full possession, management and control of the company. PMI Group warned [...]

42% of prospective homebuyers believe home values will increase 7% annually in the coming years, according to a poll by Zillow. These answers reflect the inadequate knowledge most prospective homebuyers have about the most important financial decision of their lives. In a normal market, home prices appreciate between 2% to 3% per year (the historical [...]

As part of the Administration’s plan to increase homebuyer use of private mortgage insurance (PMI) on mortgages underwritten or purchased by Fannie Mae and Freddie Mac, the Federal Housing Finance Agency (FHFA) has proposed changes to shift the risk of loss on mortgage defaults and foreclosures from the U.S. Treasury to the private sector. The [...]

The current administration’s efforts to help homeowners navigate the depressed housing market have been “not enough,” according to the President. In a recent town hall event, users from across the nation took to their Twitter feeds to ask the President questions — and hear his far lengthier replies — about the housing market. Ideas floated [...]

The current administration proposes that Fannie Mae and Freddie Mac be gradually dissolved within ten years by one of three methods: Government-guaranteed mortgages will be available only to finance home purchases by low- and moderate-income families, a task to remain the duty of a much-downsized Federal Housing Administration (FHA). This method will reduce the percentage [...]

This article exposes the inclusion of default insurance premiums and impounds as part of the total monthly payment on an FHA-insured loan, and their effect on the amount the homebuyer is qualified to borrow. Similarly discussed are the costs of private mortgage insurance (PMI).

FHA Reform Act Passed On Thursday, June 10, the United States House of Representatives passed the Fair Housing Administration (FHA) Reform Act. Upon further(almost certain) approval by the Senate, the FHA will be permitted to modify its method of administering mortgage insurance premiums (MIPs) on new mortgages. The FHA will then shift much of the [...]