Members of the Mortgage Insurance Companies of America report a significant increase in the amount of new primary insurance they wrote in February.
According to the industry group, the annual rate of mortgage insurance provided grew to an estimated $5.4 billion in February. This is a notable gain from $5 billion the previous month, and much more than the $4.2 billion of insurance reported during the same month last year.
As more mortgage insurers are providing backing for home loans, it could result in more safety and soundness throughout the entire industry.
Meanwhile, members of the group indicated that there is now roughly $397.7 billion in mortgage insurance being provided to American homeowners.
However, the Federal Housing Administration recently announced that it would be raising the rates of its insurance premiums in an effort to repair its emergency fund. Rates for an FHA-backed loan were previously set at 1 percent, but an increase to 1.75 percent is expected.
"After careful analysis of the market and the health of the MMI fund, we have determined that it is appropriate to increase mortgage insurance premiums in order to help protect our capital reserves and to continue encouraging the return of private capital to the housing market," said FHA commissioner Carol Galante.
Even though the FHA will be increasing its insurance rates, the system is expected to be more streamlined as an outcome, making it easier for borrowers to complete the process.