The fundamentals for private mortgage insurers were supposed to have improved by now. They haven't.
A year and a half ago, market watchers were expecting the companies to pick up more business after their main competitor, the Federal Housing Administration (FHA), adopted tougher standards. And concerns about whether the insurers could withstand expected losses subsided for awhile after several of them raised equity and created contingency plans that would enable them to write new business even if their capital levels fell below a certain threshold. At the same time, many states waived risk-to-capital ratio requirements that could have prevented some insurers from continuing to write policies.