August 2, 2010
Mortgage insurance industry to help with housing finance
Many different roads are being explored to make homebuying easier for consumers. Last week, when testifying before Congress, the Mortgage Insurance Companies of America said it will also be playing a role in making this a realistic goal for many Americans.
MICA's role will mainly be to help lower-income families and those purchasing homes for the first time. Private mortgage companies have been able to raise billions of dollars for underwriting new loans, which should help not only consumers but federal and state governments as well.
Mortgage Guaranty Insurance Corporation President Patrick Sinks said "the primary barrier for most borrowers to buying a home is coming up with a 20 percent down payment. That barrier can be overcome in a safe and sound manner by encouraging the use of private mortgage insurance." Sinks added that with mortgage insurers' ability to also look at risks and review credit reports, it's less likely consumers will take out home loans they cannot afford.
Texas is one of the few areas of the country that participated in mostly responsible lending in the time leading up to the collapse of the housing market because of its financial institutions refusing to participate in sub-prime loans.
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