Pete Pannes of PMI Mortgage Insurance #66

Bruce Norris is joined this week by Senior Vice President, Field Sales and National Accounts of PMI Mortgage Insurance Co., Pete Pannes. Bruce and Pete discuss the basic business of PMI, when a borrower in a transaction pays for PMI, the range in cost, when PMI is required on a loan, if sellers can pay for the cost of PMI, competitors in mortgage insurance, what would happen if a mortgage insurer went out of business and its effect on the lenders, current stresses on mortgage insurers, how the industry is structured to handle issues in the market, how insurance changes the amount a consumer can borrow, if PMI is only for first trust deeds, if PMI has gotten more popular in recent years, if property value increases reduce insurance costs, at what point PMI is cancelled, what happens if prices go backwards, can PMI be reinstated if loan to value shifts, what price range of loans PMI covers, variances in PMI by state, if PMI can be used for purchases and refinances, how the market got away from paying PMI with 80% first and 20% second, if more traditional underwriting is taking place and if it includes PMI, how PMI was ignored because of run up of appreciation in previous years, reemergence of FHA and how it compares to PMI, how the consumer benefits from PMI, how lenders benefit from PMI, if PMI makes loan more liquid on Wall Street, how PMI assists bank if foreclosure takes place, what is covered in the policy and for how much, the borrower in foreclosure and recourse against borrowers in default, how do consumers prove they are in a 20% equity position, if late payments or rapid market declines can cause the bank to change its policies, do mortgage seconds or home equity line of credit change the PMI situation going forward, will PMI be required for longer amounts of time, pmigroup.com.

Pete Pannes is Senior Vice President, Field Sales and National Accounts, for PMI Mortgage Insurance Co., responsible for ensuring operational excellence with PMI customers nationwide.

Pannes has more than 18 years combined experience in the mortgage and mortgage insurance industry. He joined PMI in 1990 as an Account Representative and was promoted to Account Executive in 1992. He was a key part of the PMI management team that in 1994 formed CMG Mortgage Insurance Company (CMG MI), PMI's joint venture with CUNA Mutual serving the growing credit union market. Pannes held several positions at CMG MI from 1994 to 2001, when he joined CUNA Mutual as Senior Vice President and General Manager of CMG MI. In 2004 he rejoined PMI as Vice President of National Sales-Division Manager, responsible for the management of all field sales and select national accounts for the Eastern U.S.

Pannes holds a Bachelor of Science degree in Business Administration from Arizona State University.

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David Berson of PMI Group #60

Bruce Norris is joined by former Chief Economist with Fannie Mae and current Chief Economist with PMI Group, David Berson. Bruce and David discuss what PMI Group does, mortgage insurance, risk lenders are no longer willing to take, the size and scope of PMI Group and its services, risk averse lenders and how it all changed, practices of lenders and pushing the credit envelope in cycles, unsustainable trends and the end of subprime, lenders passing loans through new vehicles not previously available, mortgage-backed securities and CDOs, portfolio lending, expansion of Fannie Mae and Freddie Mac and what the effects will be, investors and their assumption of risk for mortgage-backed securities, credit ratings and how they misled investors, the issue of looking backward and not forward, why pricing inflation saved the day, if the worst over, home sales and price stabilization, California in a recession, the economic signs of a recession, consumer spending, what happens if consumer spending dwindles, unemployment rates and its importance to the market, what happens if wages decline, Realtors and jobs in California, impact on bond insurers if ratings are lowered, separating muni bonds from subprime bonds, what happens when insurers go out of business, mortgage defaults, unanticipated price drops, when Fannie Mae started to be concerned, the national scope of price drops, Great Depression talk and if it’s exaggerated, raising loan limits for Fannie and Freddie, the FED and their solutions, moratorium on foreclosures, what signs to look for in a recovery, bond yield spreads and what they might say about interest rate moves by the FED, stagflation, and the percentage of housing market for employment.

As Chief Economist and Strategist, David Berson's responsibilities include domestic and global market research and planning, support of government relations and public policy, and strategic environmental planning. He also acts as a PMI spokesperson on topics related to global economic housing, and mortgage market conditions, prospects, and policy.

Berson comes to PMI from Fannie Mae, where he was Vice President and Chief Economist since 1989. At Fannie Mae Berson was responsible for advising the company on national and regional economic, housing, and mortgage policy and conditions, including forecasts and analyses of the economy, interest rates, and housing and mortgage finance markets. Berson was also a senior member of the corporate strategy group, where he provided alternative views and risk analyses based on economic and market changes.

Prior to Fannie Mae, Berson held senior management positions at Wharton Econometric Forecasting Associates overseeing domestic services, financial analysis, and modeling. As well, he has held several teaching positions at the University of Michigan, Claremont McKenna College, and Claremont Graduate School. Berson has published more than ten papers on the U.S. housing and mortgage markets.

Berson received a Ph.D. in economics and a M.P.P. in public policy from the University of Michigan, and a B.A. in history and economics from Williams College. He has a long history of civic activity and currently serves on the advisory board for the Middle Patuxent Environmental Area and the board of directors for Crossway Community, a transitional housing project for homeless families.

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