United Guaranty Statement on FHA Policy Shift Regarding Mortgage Insurance Premiums

GREENSBORO, NC, January 9, 2015

United Guaranty is supportive of the role of the Federal Housing Administration (FHA) in extending credit to underserved markets. However, FHA's latest action to reduce the mortgage insurance (MI) premiums it charges will ultimately result in a transfer of risk from private mortgage insurers back to FHA—conflicting with the Administration's stated principle of requiring more private capital in the mortgage system.

For well-qualified borrowers, United Guaranty's current rates remain below FHA's—even after the agency's large rate cut. Reducing FHA MI premiums across the board—rather than focusing on underserved borrowers—will mean that many borrowers who qualify for non-government MI will instead be put into FHA.

"Not only does this move mean the government is taking on additional risk when numerous companies backed by private capital are willing and able to provide private MI to qualified borrowers, but many families are going to be locked into FHA MI that doesn't suit their needs as well as a traditional mortgage backed by private MI," said United Guaranty President and CEO Donna DeMaio. "A more sensible policy would be for FHA to stay true to its mission of helping underserved borrowers who truly would not be able to buy homes without government-backed MI."

About United Guaranty

United Guaranty Corporation and its subsidiaries provide certainty to mortgage lenders through world-class underwriting, quality risk solutions, and dynamic pricing available through Performance Premium,® the industry's only MI pricing that is truly risk-based. Established in Greensboro, North Carolina, in 1963, United Guaranty is a company of American International Group, Inc.


Jo Fleischer, Director – Media Relations
O: 336.333.0433 | C: 336.609.3957

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