Fannie Mae on Friday suspended Republic Mortgage Insurance Co. as an approved MI to the GSE and took the added step of suspending a subsidiary that RMIC planned to write all new business through come September 1.
In a 'Selling Guide' announcement, Fannie said RMIC's primary regulator, the North Carolina Department of Insurance will not extend its waiver on the company's failure to meet the state's minimum policyholder position requirements. As a result, the state will not allow RMIC to write new policies in North Carolina after Sept. 1.
Republic Mortgage Insurance Co. of North Carolina is the name of the subsidiary that Old Republic International Corp., the parent company, had created for new business.
The suspension means that Fannie Mae will not purchase or securitize any mortgage loan (from all 50 states) insured by RMIC or RMIC-NC that is dated before May 1 or after Sept. 1. It will accept refinances where continuation of coverage has been provided.
According to figures compiled by National Mortgage News and the Quarterly Data Report, RMIC ranks last among all active MIs in terms of policies-in-force with a market share of about 9.6%.
ORI, as part of its 2Q earnings release, this week said if it is unable to get approval from its regulator and the GSEs to write new business through the subsidiary it would put RMIC into run-off mode. (Triad Guaranty, the nation's smallest MI, is currently in run-off mode.)
Late Friday telephone calls to ORI and the GSEs had not been returned.
For the day, ORI's stock fell almost 3%, and reached a new 52-week low of $10.37. Its high is $14.18.
--Paul Muolo also contributed to this report
