6.  The GSEs and FHA •  implement new eligibility requirements for mortgage insurers and alter or liberalize underwriting standards on low- down-payment mortgages they purchase;  •  alter the terms on which mortgage insurance coverage may be canceled before reaching the cancellation thresholds  established by law;  •  establish the terms to be included in mortgage insurance policies for loans that they purchase.  The GSEs recently  have informed mortgage insurers that their master insurance policies must include a series of specific items relating  to, among other things, loss mitigation, claims processing and the GSEs’  rights under the policy. We currently are  in discussions with the GSEs regarding these proposed items, which are expected to be ef fective for loans insured  beginning in 2014; •  require private mortgage insurers to perform activities intended to avoid or mitigate loss on insured mortgages that  are in default;  •  establish the amount of guarantee fees (which result in higher cost to borrowers) that the GSEs char ge on loans that  require private mortgage insurance. In December 201 1, Congress passed a law to increase the GSE guarantee fee,  and in November 2012, the FHFA directed the GSEs to increase their guarantee fees again, thus making some  privately-insured loans purchased by the GSEs more costly than FHA-insured loans;  •  intervene in mortgage insurers’ rescission practices or rescission settlement practices with lenders;  •  influence a mortgage lender’s selection of the mortgage insurer providing coverage; and •  establish capital requirements as a condition of eligibility that could be more stringent than those that are currently  in effect. 51 Some of the more recent programs of the GSEs require less insurance coverage than they historically have required, and  they have the ability to further reduce coverage requirements.  The GSEs also have the ability, among other things to:  As the largest purchasers of conventional mortgage loans, and therefore, the main beneficiaries of private mortgage  insurance, the GSEs impose requirements on private mortgage insurers that wish to insure loans sold to the GSEs. In order to be  eligible to insure loans purchased by the GSEs, mortgage insurers must meet the GSE eligibility requirements.  The current  eligibility requirements impose limitations on the type of risk insured, standards for the geographic and customer diversification  of risk, procedures for claims handling, standards for acceptable underwriting practices, standards for certain reinsurance  cessions and financial requirements that generally mirror state insurance regulatory requirements. In order to maintain the  highest level of eligibility with the GSEs, mortgage insurers historically had to maintain an insurance financial strength rating  of AA- or Aa3 from at least two of the three rating agencies by which they are customarily rated.  Although our ratings have  been downgraded substantially below these required ratings, the GSEs have allowed Radian Guaranty to operate under business  and financial remediation plans and retain its eligibility status. In addition, in February 2012, the GSEs approved RMAI (the  “GSE Approvals”) to operate as an eligible insurer on a limited basis in certain RBC States to the extent Radian Guaranty is  unable to comply with applicable Statutory RBC Requirements and is unable to continue to write new mortgage insurance in  such states. See “Risk Factors— Losses in our mortgage insurance and financial guaranty businesses have reduced Radian  Guaranty’s statutory surplus and increased Radian Guaranty’s risk-to-capital ratio; additional losses in these businesses,  without a corresponding increase in new capital or capital relief, would further negatively impact this ratio, which could limit  Radian Guaranty’s ability to write new insurance and increase restrictions and requirements placed on Radian Guaranty.”  If  the GSEs believe that our remediation plans will not provide the capital required by our mortgage insurance business, or  otherwise are not satisfied, or if we fail to comply with the terms of the GSE  Approvals, we could lose our eligibility with the  GSEs. See “Risk Factors— We could lose our eligibility status with the GSEs, causing Freddie Mac and Fannie Mae to decide  not to purchase mortgages insured by us, which would significantly impair our mortgage insurance franchise.” The Fair Credit Reporting Act of 1970 (“FCRA”), as amended, imposes restrictions on the permissible use of credit report  information. FCRA has been interpreted by some Federal Trade Commission staff to require mortgage insurance companies to  provide “adverse action” notices to consumers in the event an application for mortgage insurance is declined on the basis of a  review of the consumer’s credit.  5.  The Fair Credit Reporting Act .