Another nail in the coffin for no-money-down loans

According to a story in MarketWatch, mortgage insurer PMI Group will stop insuring any loans with loan-to-value ratios of more than 97% (which I imagine would continue to decline even further over the coming months):

In its filing on Monday, PMI, one of the largest mortgage insurers, said in the filing that on March 1 it will stop covering home loans with loan-to-value ratios of more than 97%.

After warning of higher losses in January, MGIC said it had stopped underwriting home loans that are packaged up by Wall Street investment banks and sold as mortgage-backed securities. See full story.