Mortgage Insurer Launched to Provide Insurance on Non-QM Loans


It has been a minute (or two) since I last posted about non-QM loans, but some interesting news landed on my desk this morning.

A new mortgage insurance company has been created specifically to handle credit risk on non-agency home loans.

Today, Arch MI announced the launch of Arch Mortgage Guaranty Company, or “AMG,” created for the sole purpose of insuring loans that originators plan to keep on their books or include in private securitizations.

AMG is not an approved mortgage insurer with Freddie Mac and Fannie Mae and therefore not subject to GSE requirements. It has the authority to insure all types of mortgages such as prime, standard and non-standard, jumbo, portfolio, and non-QM.

These can all be insured on an individual, bulk, or pool basis.

The company also announced that it has been assigned an A3 insurance financial strength (IFS) rating by Moody’s Investors Service with a stable outlook thanks to its strong capitalization and lack of pre-2009 mortgages.

“Arch MI is very pleased to announce the launch of our newest mortgage credit enhancement solution, Arch Mortgage Guaranty, and its ‘A3’ IFS rating from Moody’s Investors Service,” said David Gansberg, President and CEO of Arch MI, in a news release.

The A3 rating is the highest Moody’s IFS rating in the U.S. mortgage insurance industry.

“Arch MI continues to provide unique and innovative mortgage insurance solutions to our customers, including the first and only master policy offering “Day 1” rescission relief. AMG provides yet another solution to support our customers’ product expansion in today’s evolving mortgage marketplace and positions us to support our customers’ goals of expanding homeownership opportunities.”

The availability of mortgage insurance on non-QM loans should lead to more opportunities in the nascent space as current and prospective originators get more comfortable with their offerings.

However, it’s unclear what the market demand will be for insurance on non-QM mortgages early on.

Still, it looks as if the non-QM space is beginning to take shape and MI support is certainly a great step forward.

For the record, affiliate Arch MI is a GSE-approved mortgage insurer and is compliant with the private mortgage insurer eligibility requirements (PMIERs) currently in place.

(photo: Joe Parks)

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