Mortgage insurance is a form of credit protection for residential mortgages. This is traditionally used when lenders or investors require additional security to facilitate higher risk lending, such as high loan to value mortgages. AIG United Guaranty provides mortgage insurance to help lenders protect their investment against losses due to foreclosure.

MI helps in the following areas:

• Risk Transfer: MI removes a significant portion of the insured loan’s default risk from the lender’s book.
  
• High Loan-to-Value Market Expansion: MI helps lenders to increase their loan-to-value limits without adding more risk to their portfolio.
  
• New Market Segments: High loan-to-value loans result in increased homeownership and facilitates new market segments for lenders.
  
• Credit Enhancement for execution of securitisations.
  
• Basel II Support: Management of regulatory capital.