WASHINGTON Fannie Mae and Freddie Mac announced last week they have approved National Mortgage Insurance Corp., a newly chartered private mortgage insurer formed by one-time executives at financially troubled PMI Group, as eligible to provide private mortgage insurance for loans they buy.
About a dozen of National MI's 75 employees, including its CEO Bradley Shuster, and general counsel Glen Corso, came directly from PMI, which was once the nation's second-largest private mortgage insurance company, before it ran into financial trouble related to record foreclosures.
The new company, based in Emeryville, Calif., nearby PMI’s Walnut Creek offices, has raised more than $550 million in private capital and plans to offer its product in all 50 states.
Most lenders require borrowers to purchase mortgage insurance when they put less than 20% down. Although borrowers pay the premiums, the insurance protects whoever owns or guarantees the loan. Private mortgage insurers predominantly sell insurance on loans guaranteed by Fannie and Freddie
National MI will be one of seven private insurers approved by Fannie and Freddie, alongside Radian, MGIC, UGI, Essent, Genworth and CMG, a joint venture between PMI and CUNA Mutual Group, which has the largest market share among credit unions.