In what could be another nail in the coffin of the loan brokerage industry, The PMI Group of San Francisco confirmed Wednesday that it will no longer insure any mortgages brought to them by third-party originators unless these firms have a warehouse line of credit.
It’s believed that PMI is the first of the nation’s seven MI firms to totally exclude loan brokers from their coverage menus.
In recent months, the MIs have tightened guidelines on broker-sourced loans, particularly condominiums and high LTV notes.
A PMI spokesman confirmed the new policy change to National Mortgage News adding that, “This does not apply to correspondents.”
Marc Savitt, president of the National Association of Mortgage Brokers said he just learned of PMI’s decision and would comment on Thursday.
The PMI spokesman had no immediate figures on how much of its coverage entails broker loans.