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FHA Pullback Boosts Mortgage Insurers Once Seen Failing

The once-moribund private mortgage insurance industry is increasing market share and raising cash as it presses its advantage in lobbying Congress to consider changes that would reduce the role of the Federal Housing Administration, its dominant government rival.

Now, as FHA has raised premiums to help cover a $16.3 billion budget shortfall, insurers have made inroads into the market, increasing their share to 35 percent of policies in the fourth quarter, up from 26 percent in the first, according to Inside Mortgage Finance. The FHA and the Department of Veterans Affairs account for the rest.