July 10, 2014 / 8:05 PM / in 4 years

U.S. FHFA asks for public comment on private mortgage insurance rules

WASHINGTON, July 10 (Reuters) - A U.S. housing regulator on Thursday asked for public comment on proposals to tighten requirements for private insurers that do business with government-controlled mortgage finance firms Fannie Mae FNMA.OB and Freddie Mac FMCC.OB.

The two firms back most mortgages in the United States, but they also contract private firms to insure loans where the loan-to-value ratio is above 80 percent.

This helps shield taxpayers from some losses when people default on their mortgages.

The Federal Housing Finance Agency (FHFA) said in a statement the proposed rules would help ensure “approved insurers have a sufficient level of liquid assets from which to pay claims.”

The FHFA will take accept public commentary on the rules until September 8.

Fannie Mae and Freddie Mac are owned by U.S. taxpayers, who bailed out the firms in 2008 during the financial crisis. The FHFA runs the two firms through a conservatorship. (Reporting by Jason Lange; Editing by Meredith Mazzilli)

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