WASHINGTON -- In a bid to expand their share of the low-income market, private mortgage insurers have been talking to the Federal Housing Administration about co-insuring low-income home loans.

The talks, which have occurred off and on in the last year, have not yielded specific results, according to Suzanne Hutchinson, executive vice president of the Mortgage Insurance Companies of America.

The project would likely require new legislation, whose fate has become even more uncertain with Republican control of Congress.

Ironically, private mortgage insurers played an active role in the defeat of legislation this year that would have allowed FHA to enter such experimental arrangements.

A MICA spokeswoman said the trade group opposed the arrangement, because it did not agree with the specific design of the government's proposed experiments.

Ms. Hutchinson explained that private insurers want to ensure that the new product would not insure 100% of the loan amount, as the FHA's insurance now does.

Instead, the private companies want lenders and investors such as Fannie Mae and Freddie Mac to share in the risk, Ms. Hutchinson said.

"When everybody stands to lose money in the case of default, your motivation is to work keeping with the borrower to keep them in the home; '-she said. In addition, private-insurers want the program to. be clearly targeted to low-income borrowers, that is those who make roughly median income, Ms. Hutchinson said.

She added that private companies were open tO taking on the task of underwriting the shared insurance, and servicing insurance claims.

"We have better underwriting, better distribution, [and] better technology," Ms. Hutchinson said.

Nicolas P. Retsinas, assistant secretary of housing and federal housing commissioner, said the government has "an open door" to partnerships.

The measure of a partnership is whether it would "allow us to reach out in a responsible manner to additional homeowners who do not now have access to homeownership," he said.

But he added that with recent improvements in FHA's product, "the bar" on whether or not the government will get into a partnership is higher.

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