Of the publicly traded insurers, MGIC, Genworth and United Guaranty (part of AIG), reported positive income, with Radian still trying to break out of negative territory. Privately held Essent Guaranty, a newbie, is coming on strong, with $10 billion in new business through the first half, versus $3.6 billion in the year-earlier period, according to IMF.

“Delinquencies are down, and the companies have recapitalized,” said Bose George, an analyst at Keefe Bruyette Woods. “At the same time, FHA is reducing its role in the market, so this has given them significant growth opportunities. … The companies have reversed their position and are starting to show modest profitability.”

(Read more: Mortgage delinquencies take a sharp turn up)

The private insurers have also benefited from the government housing bailout—the refinance program for underwater borrowers as well as the Home Affordable Modification Program. Both help borrowers make their monthly payments and stay current on their loans, although HAMP has come under fire recently as a report from the Troubled Asset Relief Program’s inspector general found the program had a high re-default rate.

Article source: http://www.cnbc.com/id/100956144

It’s no surprise that the private mortgage insurance industry is fighting hard against proposed new risk retention rules for the mortgage industry.

They are already trying to pick themselves up and dust themselves off from the near knockout punch the Federal Housing Administration (FHA) gave them, when the government mortgage insurer took over their market share while saving the housing market from complete and total bust.

The FHA became the only game in town for the less credit-worthy borrowers with lower down payments. Now, just when the private guys are trying to get back in the game, they’re getting battered again.

The proposal for a “Qualified Residential Mortgage,” which would be exempt from 5 percent risk retention by the banks, which of course the banks don’t want to retain, requires, among many things, that the buyer put 20 percent down on the home.

“We do not believe that affordability and sustainability are mutually exclusive goals,” Kevin Schneider, president of the Mortgage Insurance Companies of America testified before Congress yesterday (he’s also CEO of U.S. Mortgage Insurance of Genworth Financial [ GNW 12.26  +0.00 (+0.00%) ]). “We understand the drivers of sustainable, affordable homeownership because the private MI industry has a vested interest in assuring that low down payment homebuyers purchase homes with loans that they can afford to pay over time.”

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