Changes for Mortgage Insurance: What You Need to Know
Bob Massi explains
- Duration 4:19
- Date Oct 24, 2011
Bob Massi explains
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Beating his his stunning developments today the state of Arizona will take over one of the largest personal mortgage insurance company in the country.
And this will have effects for homeowners across the nation the -- to Fox News legal analyst and real estate expert.
Bob Massi joins us from Vegas morning's -- good morning to you Bob -- Meyer has been seized by the the state of Arizona.
I remember when I wouldn't live to Washington DC I bought a house using PM I didn't have enough for a down payment does this impact people all across the country.
It doesn't remember about this PM my problem -- -- is actually insurance company which is one of the largest in the country the reason why.
I felt import to bring this bring this to our viewers attention is this.
This company is has been -- as you said by the director of insurance commissioner in Arizona that's where they're based out of but as a national impact -- this is what's going -- They're going to ask the court to appoint a receiver a receiver Steve is somebody that steps in to oversee.
Exactly what's going on -- this company in many times it means that there insolvent.
This potentially speed is a symptom of an epidemic these companies.
And other companies as you know our insurance companies that pay deficiencies.
From conventional loans which you and I talked about several weeks ago.
So this is a story that I want our viewers to understand that.
Many of us don't know -- who even insurers -- particular loan.
And there is an 800 number on their website the call and see -- how they will be impacted.
By this private mortgage insurance take over.
Sure -- historically what's happened is if somebody wants to buy a house can't come up with 20% of the down payment they buy PM my private mortgage insurance and that guarantees it.
Or eight so Bob if this company has now been seized by the state of her.
Have -- what happens to the homeowner I mean what if they have to make a client well.
You know here here's a couple things it just concerns received first -- ball.
There are those homeowners right now who are in a position.
To get a conventional loan but didn't have 20% now -- the question is going to be if if we have these companies that are being -- Any impact could be that all people ordered have to come up with 20%.
To get a conventional -- and what does that mean that means a lot of people -- -- 20%.
And if all of these companies start being having solvency problems it's gonna -- -- the impact of being able to buy.
The other thing is what they basically said on their website Steve.
The state of Arizona by taking over will honor or try to pay out 50%.
Of the claims in other words 50% of what may be owed.
On these deficiencies.
The other 50% goes -- the policyholders who was a policy holders the lenders if the lenders lose who bails them out.
Us so the rippling -- here could be devastating.
-- but we're gonna have to wait and see how this plays out but I think it's an important not lending industry that they Steve.
I guarantee you this is what they're going to be talking about the impact of these underwriters.
But it's a gigantic impact once again.
And you just detailed what the impact would be on the taxpayer we might actually have to bail them out.
So going forward given the fact that PM -- has you know been seized by air zona.
Are people going to have to come up with -- you know the full 20% or if you look -- that's gonna change our way people buy.
-- Well first of all there are several underwriters in this country to do insurance the question is going to be what's the solvency of those it.
Back other underwriters insurance companies and there's many that they're still out there to be available screen while -- sure that its market impact everybody.
But I believe that this is a rippling effect.
That in fact we're gonna see more and again I can't stress enough when you have a company this -- That's being seized by the division of insurance because of some issues of either solvency or management issues.
It goes to show you how serious.
This problem is and America.
And we have got to do the things we've talked about before -- shattered dreams solve the issue.
No kid all right excellent analysis of what's going on.
Bob -- we thank you very much for joining us today from Las Vegas.
Always pleasure it's.