Fannie Mae-No Politics (FNMA)

[clarencebeaks21]

Two MI companies I can recall went into run-off specifically due to the GFC: PMI (regulated by state of AZ) and Triad (regulated by state of IL). The industry founder MGIC survived, as did others, and also new competitors arose, most notably Essent and NMI. I believe Essent is now the market share leader.

IMHO in the lead up to the GFC all the legacy MI companies joined in the race to the bottom, instead of acting as gate keepers. But oversight today is stronger, not just by state regulators, but also by FHFA (via FnF) implementing the Private Mortgage Insurer Eligibility Requirements (‘PMIERs’).

Regarding Rocket’s buy back ability, the non-bank financial institutions (NBFIs) are now regulated by the CFPB. So to even begin to think about your question I would have to start with research at the CFPB into its regulatory system for the NBFIs. I have to concede ignorance on that front.

Borrowers with only 1% skin in the game seems risky to me as well, but FnF already buys low-skin in the game LMI loans by accepting 50 different states’ HFA LMI programs—many which marry a 1% DP to a grant or community second. So FnF buying ‘One+’ by Rocket is maybe not as large a step as it may first appear. We shall see how it turns out!