PMI: mortgage backstop from the Alger Report to Dodd-Frank

Abstract

Purpose

The purpose of this paper is to provide a historical perspective and going-forward assessment of the importance of private mortgage insurance (PMI) entities in the residential-lending landscape in the USA.

Design/methodology/approach

Financial data from the PMI entities and federal income tax data were analyzed to comment on the importance of the PMI entities in the historical and current mortgage-lending environment.

Findings

PMI entities played a critical role in expanding the population of mortgage candidates for financial institutions. Through the guarantees offered by PMI entities, financial institutions granted loans to individuals who otherwise would not have qualified for mortgages.

Originality/value

No prior research has assessed the overall historical role played by these primary PMI entities.

Citation

Neidermeyer, A., E. Boyd, N. and Neidermeyer, P. (2014), "PMI: mortgage backstop from the Alger Report to Dodd-Frank", Journal of Financial Regulation and Compliance, Vol. 22 No. 1, pp. 43-48. https://doi.org/10.1108/JFRC-02-2013-0003