UPDATE 1-Freddie Mac keeps insurers at top level post review
(Recasts lead, adds detail and background)
NEW YORK, June 20 (Reuters) - Freddie Mac (FRE.N), the second-largest provider of funding for U.S. home mortgages, on Friday said plans by three mortgage insurers to boost capital would keep them top-tier counterparties with the company.
Mortgage Guaranty Insurance Corp (MTG.N), PMI Mortgage Insurance Co (PMI.N) and Radian Guaranty, Inc (RDN.N) will continued to be treated as "type 1" insurers following its review of their plans to improve credit ratings, Freddie Mac said in an e-mailed statement.
McLean, Virginia-based Freddie Mac asked for remediation plans after downgrades put ratings on units of the insurers below the "AA" level. The three insurers covered $205 billion of unpaid principal balance of mortgages and mortgage pools for Freddie Mac as of March 31.
Remediation plans are intended to help the insurers regain "AA" ratings and enhance capital positions, Freddie Mac said.
The housing slump and mortgage crisis have pressured capital at private mortgage insurers, which back a portion of the risk when borrowers finance more than 80 percent of their home. Claims have risen as poor underwriting and falling prices have exacerbated delinquencies.
Triad Guaranty Inc TGIC.O, on Thursday said a unit would wind down its business after Freddie Mac denied an appeal of its suspension as an approved counterparty, and unsuccessful negotiations with a private equity firm.
(Reporting by Al Yoon, Editing by Chizu Nomiyama)
