Essent Guaranty Inc. has been approved as a qualified mortgage insurer by Fannie Mae and Freddie Mac, the company says.
Fannie Mae is ready to accept loans with notes dated on or after Feb. 18, with mortgage insurance from Essent. Freddie Mac anticipates being ready to accept business from Essent by April 1. Both government-sponsored enterprises (GSEs) will be communicating directly with lenders regarding the timing and process.Â
‘The GSEs' approvals officially launch our entry into the mortgage insurance business and enable us to begin supporting qualified borrowers,’ says Mark Casale, president and CEO of Essent, which acquired the information technology and operating platform of Triad Guaranty last October.
The company has $500 million in invested and committed equity funding from a group of financial services investors, including Pine Brook Road Partners, Goldman Sachs, J.P. Morgan, PartnerRe and RenaissanceRe Ventures Ltd.
‘We appreciate the efforts that Essent has made during the past year to meet our eligibility requirements and obtain their qualified mortgage insurer approval to serve Fannie Mae's seller/servicer network,’ says Carlos Perez, Fannie Mae's vice president of risk management. ‘We are pleased to have a new mortgage insurance partner to offer much-needed capacity to our market.’Â
On Thursday, Fannie Mae, in a letter to lenders, stated that in addition to Essent, the company has approved Republic Mortgage Insurance Co. of North Carolina, MGIC Indemnity Corp. and PMI Mortgage Assurance Co. as new mortgage insurers. The companies are affiliates of Republic Mortgage Insurance Co., Mortgage Guaranty Insurance Corp. and PMI Mortgage Insurance Co., respectively.
The charter of the GSEs requires that loans with a loan-to-value ratio in excess of 80% have additional credit support to protect the GSEs against losses. The most common form of this credit support is private mortgage insurance, which pays an insurance benefit to the lender, or investor in a mortgage loan, in the event of a foreclosure or certain other circumstances arising from a default and resulting in loss to the insured.