Capital Securities’ funding lines have reportedly been put on hold as a result of ratings downgrades to the two parent companies of mortgage insurers PMI and MGIC.
Due to the requirement that all loans funded by institutional warehouse facilities be insured by an insurer with ratings of AA or AA-, Capital Securities will only be able to have its loans insured by Genworth.
Furthermore, Capital Securities has been informed by its funders that any loans already settled and insured through MGIC and PMI would need to be reinsured through Genworth.
Mortgage Business was unable to secure comment from Capital Securities; the lender’s website remains "under construction".
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