Fannie Mae has given its blessing to a mortgage insurance company that was recently acquired, while three affiliates of major M.I. firms have been suspended.
The Washington, D.C.-based firm said that it approved the acquisition of CMG Mortgage Insurance Co. and its affiliates by Arch U.S. MI Holdings Inc.
CMG will become a subsidiary of Arch U.S. MI and be renamed Arch Mortgage Insurance Co., according to Fannie.
In Lender Letter LL-2014-01, the secondary lender said that there are no changes to CMG’s MI Code or its ULDD Enumerated Value, which is “38.” If the number changes, then advance notice will be provided to sellers and servicers.
The notice also indicated that approval MGIC Indemnity Corp., Radian Mortgage Assurance Inc. and Genworth Residential Mortgage Assurance Corp. is being suspended.
The three entities are affiliates of approved mortgage insurers Mortgage Guaranty Insurance Corp., Radian Guaranty Inc. and Genworth Mortgage Insurance Corp.
“These entities were approved by Fannie Mae to provide mortgage insurance in a limited number of states only through Dec. 31, 2013, but either never issued any insurance policies or have ceased issuing new insurance policies in connection with loans to be delivered to Fannie Mae,” the lender letter stated. “Fannie Mae approvals of these entities automatically expired by their terms and they are being removed from the list of Fannie Mae-approved mortgage insurers.”
Fannie said that the suspensions don’t reflect any concerns about their claims-paying ability. The entities — which were created during a period when their flagship affiliates were struggling to meet regulatory capital requirements — are no longer needed for each mortgage insurer to write new insurance nationwide.
Any loans that are insured by any of the trio of suspended insurers need to have note dates no later than Dec. 31, 2013. They also need pool issue dates of no later than July 1, 2014, or delivery dates on or before July 31, 2014, for whole loans.
