As our military return from overseas, private insurers are considering a request by U.S. officials to guarantee mortgages for veterans — the fastest growing part of the market. More than 2.6 million servicemen and women have served overseas since 2001. The cost of Federal Housing Administration insurance has increased and the VA’s share of home lending has gone up and accounted for almost 9% in the second quarter, a 20-year high. Insurers including American International Group Inc. and MGIC Investment Corp. are looking at these loans as their role in the mortgage market expands.
The Department of Housing and Urban Development is urging mortgage insurers that rely on Fannie Mae and Freddie Mac for business to offer supplemental protection for lenders to military members and veterans. Only 25% of VA loan amounts are backed by the Department of Veterans Affairs — a limit that keeps some firms from fully participating in the program, Ginnie Mae President Ted Tozer said. >>>More