Old Republic maybe getting a second look
Old Republic International, a multinational insurance organization, exited the mortgage insurance business just over two months ago. The company had been operating under a waiver provided by federal insurance regulators that allowed it to sell policies. When the waiver expired, the company took the opportunity to renovate its mortgage policies to accommodate changes made to insurance laws in a number of states. Now, the insurer is looking to re-enter the national market, hoping to gain favor with federal regulators and investors.
Old Republic’s goal hinges on whether the company can win new capital from investors, who have been leery of the real estate business since the mortgage crisis of 2008. The insurer has been in talks with Fannie Mae and Freddie Mac, two financial institutions, in the hopes of bartering a deal. The money garnered from investors will be used to recover from losses before the company left the mortgage market.
Apart from investors, the insurer will have to deal with insurance regulators that have begun fervently policing the mortgage business. Regulators may be dissuaded from approving Old Republic’s re-entry into the market after viewing the company’s losses from earlier in the year. In the first nine months of 2011, Old Republic saw more than $500 million in operating losses, which threatened to destabilize the company’s finances. Regulators are expected to reach a determination on the issue by the end of the month.