Posted By: Tsu-Han (Ina) Chang Written By: Bob Tedeschi
PRIVATE mortgage insurance, known to many as P.M.I., is a necessary evil for borrowers who cannot afford the 20 percent down payment often required by lenders. But now, with losses mounting within the mortgage-insurance industry, some applicants are being turned away, while others will have to pay higher premiums.
At least five of the six major insurers recently changed their policy qualifications. One of them, the PMI Group, which is based in Walnut Creek, Calif., said in February that it would no longer insure mortgages obtained through brokers, and it stopped offering private mortgage insurance for condos and other attached-housing units.
Meanwhile, the Mortgage Guaranty Insurance Corporation of Milwaukee said that it would no longer insure cash-out refinance mortgages and mortgages for second homes or manufactured homes.
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