Pacific Life Re has re-opened the debate surrounding need for protection to be made compulsory in some capacity after the government unveiled its mortgage indemnity guarantee scheme.
It suggested that the industry should be urging government to insist borrowers take out a minimum level of protection to be eligible for it. The scheme is a key part of the coalition's housing strategy and will see government underwrite mortgages up to 95% loan to value (LTV) on new build properties. Lenders will provide loans with significantly lower deposits than the 20% or more that is typically demanded, but taxpayers could be liable for losses in the event that a home is repossessed. The reinsurer believes that given the risks to the public purse, compelling a minimum level of...
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