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Mortgage insurers turn down Fannie's high DTI loans - Washington Post

Published 03/14/2018, 08:33 AM
© Reuters.  Mortgage insurers turn down Fannie's high DTI loans - Washington Post
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  • Fannie Mae (OTCQB:FNMA) began relaxing underwriting standards to accept low down payments for mortgages with debt-to-income ratios of as high as 50% in recent times. This resulted in a 20% rise in loan application volumes of these riskier borrowers according to Fannie's latest quarterly filing.
  • Insurers have fired back, saying these types of mortgages presented increased risk. "We've seen this movie before," says MGIC Insurance's (NYSE:MTG) Mike Zimmerman.
  • Along with MGIC, Essent Guaranty (NYSE:ESNT) and Radian Guaranty (NYSE:RDN), all changed policy this month regarding these low down payment mortgages.
  • Fannie has since responded, acknowledging the issues raised on automated underwriting, and as a result approved fewer of these types of loans.
  • Now read: Bottom Fishing The Dividend Aristocrats: There's Still A Lot To Like About Old Republic


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