We tend to think of the mortgage market crisis as affecting mainly mortgage lenders and homeowners. However, there are other companies that depend on the mortgage market, and they are being affected as well.

One group is private mortgage insurance issuers.

Private mortgage insurance going down

Private mortgage insurance (PMI) is something that homebuyers get when their down payment doesn’t amount to 20% of the purchase price. The idea is that the issuer pays mortgage lenders for the remainder if a default happens.

With mortgages from 2007 failing at even more rapid pace than those from 2006, private mortgage insurance issuers are finding that they have to make a lot more payouts. And this is affecting them in a very real way when it comes to available capital and earnings.