Mortgage insurance doesn't get a lot of notice these days. But the recently announced sale of AIG's mortgage insurance unit United Guaranty Corp. to Arch Capital turned a spotlight on a corner of the mortgage market that tends to lie in the shadows of Fannie Mae, Freddie Mac and the Federal Housing Administration.
Mortgage insurers got more attention in the mortgage crisis, but not for good reasons. It was a traumatic period. Three of the eight MI companies stopped writing insurance and others faced nearly catastrophic losses that were in part ameliorated by amplified rescission rates on MI policies that to this day remain a sore point for many mortgage lenders.