Changes

== History ==

== History ==

Mortgage insurance began in the United States in the 1880s, and the first law regulating it was passed in [[New York]] in 1904. The industry grew in response to the 1920s real estate bubble and was "entirely bankrupted" after the Great Depression. The bankruptcy was related to the industry's involvement in "mortgage pools", an early practice similar to mortgage securitization. The federal government began insuring mortgages in 1934 through the Federal Housing Administration and Veteran's Administration, but after the Great Depression no private mortgage insurance was authorized in the United States until 1956, when Wisconsin passed a law allowing the first post-Depression insurer, [[Mortgage Guaranty Insurance Corporation]], to be chartered. This was followed by a California law in 1961 which would become the standard for other states' mortgage insurance laws. Eventually the [[National Association of Insurance Commissioners]] created a model law.<ref>Jaffee D. (2006). [http://faculty.haas.berkeley.edu/JAFFEE/Papers/094lRIO2006.pdf Monoline Restrictions, with Applications to Mortgage Insurance and Title Insurance]. ''Review of Industrial Organization''.</ref> Mortgage insurance companies again suffered in the [[Recession of 2008]].  Mortgage insurance has been controversial because some critics claim that it made the encouraged excessive [[subprime mortgage]] lending.

Mortgage insurance began in the United States in the 1880s, and the first law regulating it was passed in [[New York]] in 1904. The industry grew in response to the 1920s real estate bubble and was "entirely bankrupted" after the Great Depression. The bankruptcy was related to the industry's involvement in "mortgage pools", an early practice similar to mortgage securitization. The federal government began insuring mortgages in 1934 through the Federal Housing Administration and Veteran's Administration, but after the Great Depression no private mortgage insurance was authorized in the United States until 1956, when Wisconsin passed a law allowing the first post-Depression insurer, [[Mortgage Guaranty Insurance Corporation]], to be chartered. This was followed by a California law in 1961 which would become the standard for other states' mortgage insurance laws. Eventually the [[National Association of Insurance Commissioners]] created a model law.<ref>Jaffee D. (2006). [http://faculty.haas.berkeley.edu/JAFFEE/Papers/094lRIO2006.pdf Monoline Restrictions, with Applications to Mortgage Insurance and Title Insurance]. ''Review of Industrial Organization''.</ref> Mortgage insurance companies again suffered in the [[Recession of 2008]].  Mortgage insurance has been controversial because some critics claim that it made the encouraged excessive [[subprime mortgage]] lending.{{fact}}

 

==Public mortgage insurance==

==Public mortgage insurance==

To obtain public mortgage insurance from the [[Federal Housing Administration]] in the United States, a homeowner must pay an ''upfront mortgage insurance premium'' (UFMIP) equal to 1.75 percent of the loan amount at closing<ref>http://www.fha.com/fha_requirements_mortgage_insurance.cfm</ref>.  This premium is normally included in the mortgage amount and paid to FHA on the borrower's behalf. Depending on the [[loan-to-value ratio]], there may be a monthly premium as well. The United States Veterans Administration also offers insurance on mortgages.<ref name="va1"/>

To obtain public mortgage insurance from the [[Federal Housing Administration]] in the United States, a homeowner must pay an ''upfront mortgage insurance premium'' (UFMIP) equal to 1.75 percent of the loan amount at closing<ref>http://www.fha.com/fha_requirements_mortgage_insurance.cfm</ref>.  This premium is normally included in the mortgage amount and paid to FHA on the borrower's behalf. Depending on the [[loan-to-value ratio]], there may be a monthly premium as well. The United States Veterans Administration also offers insurance on mortgages.<ref name="va1"/>