Shares in publicly traded mortgage insurance companies dropped between 5% to 8% in a single day and are down by 5% to 12% so far this year, according to an investor note published Tuesday by Keefe, Bruyette & Woods (KBW).

KBW analysts Bose George and Frankie Labetti explained that the main concern appears to be tied to a proposal that would reduce mortgage insurance premiums (MIP) on Federal Housing Administration (FHA) loans as part of a push by the Trump administration to improve housing affordability.

Current FHA premiums are 175 basis points (bps) upfront and 55 bps annually, details ⇒

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