NMI Holdings, Inc. ("NMIH"), a Delaware corporation, was formed in May 2011 with the intention of providing private mortgage guaranty insurance through a wholly owned insurance subsidiary. From May 2011 through March 2013, our activities were limited to raising capital, seeking to acquire the assets and approvals necessary to become a private mortgage guaranty insurance provider and hiring personnel. We are licensed in all 50 states and Washington D.C. In April 2013, we, through our primary insurance subsidiary, National Mortgage Insurance Corporation ("NMIC"), wrote our first mortgage guaranty insurance policy. As of JuneSeptember 30, 2014, we had $939.8 million$1.8 billion of primary insurance in force ("IIF") and $4.9$4.8 billion of pool IIF, with $220.9$435.7 million of primary risk-in-force ("RIF") and $93.1 million of pool RIF.

On November 30, 2011, we entered into an agreement with MAC Financial Ltd. to acquire MAC Financial Holding Corporation and its subsidiaries, which were renamed NMIC, National Mortgage Reinsurance Inc One ("Re OneOne") and National Mortgage Reinsurance Inc Two ("Re Two,Two"), for $8.5 million in cash, common stock and warrants plus the assumption of $1.3 million in liabilities ("MAC Acquisition"). In addition, we incurred $0.1 million in deferred tax liabilities as a result of the acquisition of certain indefinite-lived intangibles. The MAC Acquisition was completed in April 2012. On September 30, 2013, we merged MAC Financial Holding Corporation into NMIH, with NMIH surviving the merger. Also on September 30, 2013, we merged Re Two into NMIC with NMIC surviving the merger.

In April 2012, we offered and sold 55.0 million shares of common stock at an issue price of $10.00 per share in a private placement ("Private Placement"). Gross proceeds from the Private Placement were $550.0 million. Net proceeds from the Private Placement, after an approximate 7% underwriting fee and other offering expenses, were approximately $510 million. The fee was escrowed for the benefit of FBR Capital Markets and Co. ("FBR") and was released to FBR upon NMIC's receipt of approval from Federal National Home Mortgage Association ("Fannie Mae") and Federal Home Loan Mortgage Corporation ("Freddie Mac") as a qualified mortgage guarantee insurer ("GSE Approval").

Under the terms of certain Registration Rights Agreements to which we are a party (collectively the "Registration Right Agreement"), we were required to obtain GSE Approval on or before January 17, 2013. NMIC was approved as an eligible mortgage guaranty insurer by Freddie Mac and Fannie Mae (collectively the "GSEs") on January 15, 2013 and January 16, 2013, respectively, which approvals require NMIC to continue meeting certain conditions, which include an agreement to maintain minimum capital of $150 million at NMIC and that NMIC not exceed a risk-to-capital ratio of 15:1 for its first three years. Although NMIC's capital and risk-to-capital ratio are well withinNMIC is currently in compliance with these constraints, at June 30, 2014, NMIH had sufficient resources to downstream cash to either insurance subsidiary, as necessary, to comply with all commitments.requirements.

On April 7,March 26, 2014, we received our final certificateNMIH contributed $20 million in cash to NMIC to support its minimum surplus requirement as part of authority (our insurance license permitting usGSE Approval. On September 18, 2014, NMIH contributed an additional $70 million in cash to write mortgage guaranty insurance in that state) from the state of Wyoming. With Wyoming, we are now licensed in all 50 states and Washington D.C.NMIC.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements, which include the results of NMIH and its wholly owned subsidiaries, have been prepared in accordance with the instructions to Form 10-Q as prescribed by the United States ("U.S.") Securities and Exchange CommissionSEC for interim reporting and include all of the other information and disclosures required by accounting principles generally accepted in the U.S. ("GAAP"). Our accounts are maintained in U.S. dollars. These statements should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, 2013 included in our Annual Report on Form 10-K. All intercompany transactions have been eliminated. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities as of the balance sheet date. Estimates also affect the reported amounts of income and expenses for the reporting period. Actual results could differ from those estimates. The results of operations for the interim period may not be indicative of the results that may be expected for the full year ending December 31, 2014.

Basic net loss per share is based on the weighted-average number of common shares outstanding, while diluted net loss per share is based on the weighted-average number of common shares outstanding and common stock equivalents that would be issuable upon the exercise of stock options, other stock-based compensation arrangements, and the dilutive effect of outstanding warrants. As a result of our net losses for the quartersthree months ended JuneSeptember 30, 2014 and JuneSeptember 30, 2013, 5.9 million and 5.3 million shares of our common

Deferred Policy Acquisition Costs

Costs directly associated with the successful acquisition of mortgage guaranty insurance policies, consisting of certain selling expenses and other policy issuance and underwriting expenses, are initially deferred and reported as deferred policy acquisition costs ("DAC"). For each book year of business, these costs are amortized to incomeexpense in proportion to estimated gross profits over the estimated life of the policies.  We recorded net DAC of $1.1$1.7 million at JuneSeptember 30, 2014 and $90.2 thousand at December 31, 2013.

We consider whether a premium deficiency exists at each fiscal quarter using best estimate assumptions as of the testing date. Per ASCFinancial Accounting Standards Board Accounting Standards Codification ("ASC") 944, a premium deficiency reserve shall be recognized if the sum of expected claim costs and claim adjustment expenses, expected dividends to policyholders, unamortized acquisition costs, and maintenance costs exceeds related unearned premiums and anticipated investment income. We have determined that no premium deficiency reserves were necessary for the quarterthree months ended JuneSeptember 30, 2014 or for the year ended December 31, 2013.

Reclassifications

Certain items in the financial statements as of December 31, 2013 and for the quarterthree months ended JuneSeptember 30, 2013 have been reclassified to conform to the current period's presentation. There was no effect on net income or shareholders' equity previously reported.

Subsequent Events

We have considered subsequent events through the date of this filing.

We entered into a purchase/placement agreement that closed in April 2012, pursuant to which we offered and sold an aggregate of 55,000,000 of our Class A common shares, resulting in gross proceeds of $550.0 million and net proceeds of approximately $510 million after an approximate 7% underwriting fee and other offering expenses. On November 8, 2013, we completed an initial public offering of 2.4 million shares of common stock, and our common stock began trading on the NASDAQ under the symbol "NMIH". Net proceeds from the offering were approximately $28 million, after an approximate 6% underwriting fee and other offering expenses and reimbursements pursuant to the underwriting agreement.

Fair Values and Gross Unrealized Gains and Losses on Investments

Scheduled Maturities

Net Realized Investment Gains (Losses) on Investments

Aging of Unrealized Losses

Net investment income is comprised of the following:

The following describes the valuation techniques used by us to determine the fair value of financial instruments held at JuneSeptember 30, 2014 and December 31, 2013:

We established a fair value hierarchy by prioritizing the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1

The level of market activity used to determine the fair value hierarchy is based on the availability of observable inputs market participants would use to price an asset or a liability, including market value price observations.

Assets classified as Level 1 and Level 2

To determine the fair value of securities available-for-sale in Level 1 and Level 2 of the fair value hierarchy, independent pricing sources have been utilized. One price is provided per security based on observable market data. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing sources and believe that their policies adequately consider market activity, either based on specific transactions for the issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. A variety of inputs are utilized by the independent pricing sources including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers and reference data including data published in market research publications. Inputs may be weighted differently for any security, and not all inputs are used for each security evaluation. Market indicators, industry and economic events are also considered. This information is evaluated using a multidimensional pricing model. Quality controls are performed by the independent pricing sources throughout this process, which include reviewing tolerance reports, trading information and data changes, and directional moves compared to market moves. This model combines all inputs to arrive at a value assigned to each security. We have not made any adjustments to the prices obtained from the independent pricing sources.

Liabilities classified as Level 3

The warrants outstanding are valued using a Black-Scholes option-pricing model in combination with a binomial model and Monte Carlo simulation used to value the pricing protection features within the warrants. Variables in the model include the risk-free rate of return, dividend yield, expected life and expected volatility of our stock price.

The following is a list of those assets and liabilities that are measured at fair value by hierarchy level as of JuneSeptember 30, 2014 and December 31, 2013:

The following is a roll-forward of Level 3 liabilities measured at fair value for the sixnine months ended JuneSeptember 30, 2014 and the year ended December 31, 2013:

We revalue the warrant liability quarterly using a Black-Scholes option-pricing model, in combination with a binomial model and a Monte-Carlo simulation model, which is used to value the pricing protection features within the warrant. As of JuneSeptember 30, 2014 the assumptions used in the option pricing model were as follows: a common stock price as of JuneSeptember 30, 2014 of $10.50,$8.65, risk free interest rate of 2.02%2.16%, expected life of 6.586.74 years, expected volatility of 39.0%, and a dividend yield of 0%. The change in fair value is primarily attributable to a decline in the price of our common stock from December 31, 2013 to JuneSeptember 30, 2014.

The carrying value of other selected assets on our consolidated balance sheet approximates fair value.

We establish claim reserves to recognize the estimated liability for insurance claims and claim expenses related to defaults on insured mortgage loans. Our method, consistent with industry practice, is to establish claim reserves only for loans in default. Our claim reserves also include amounts we expect to incur for claims and claim adjustment expenses from defaults that we estimate to have occurred, but which have not yet been reported to us ("IBNR"). We have received our first notice of default ("NOD") within our primary insurance book in the second quarter of 2014, andwhich subsequently cured during the third quarter of 2014. Therefore, we currently do not have any reserves related to reported NODs. We have, however, established a small IBNR reserve for that NOD and for claims that we believe have been incurred but not reported ("IBNR") for the three and sixnine months ended JuneSeptember 30, 2014. For the year ended December 31, 2013 we establishedhad no claim or IBNR reserves. Additionally, we entered into a pool insurance transaction with Fannie Mae, effective September 1, 2013. ForWe would only establish claim or IBNR reserves for this pool transaction, any claim reserves potentially established would be in excess ofif we expect claims to exceed the transaction's deductible, which represents the amount of claims absorbed by Fannie Mae before we are obligated to pay any claims under the policy. At September 30, 2014, nine loans in the pool were past due by 60 days or more. These nine loans represent approximately $766 thousand in RIF. Due to the size of the deductible ($10.3 million), the low level of NODs reported through JuneSeptember 30, 2014 and the high quality of the loans (all loans are less than 80% LTV), we have not established any pool reserves for claims or IBNR for the three and sixnine months ended JuneSeptember 30, 2014 or for the year ended December 31, 2013.

The following table provides a reconciliation of the beginning and ending reserve balances for insurance claims and claims expenses for the sixnine months ended JuneSeptember 30, 2014 and 2013:

Software and equipment includes capitalized software purchased in connection with the MAC Acquisition which had a fair value of $5.0 million at the date of acquisition, as well as software we have developed. Software and equipment, net of accumulated amortization and depreciation, as of JuneSeptember 30, 2014 and December 31, 2013 consist of the following:

Amortization and depreciation expense for the three and sixnine months ended JuneSeptember 30, 2014 and 2013 was $1.7 million, $3.0 million, $1.8 million, $4.7 million, $2.0 million and $1.8$3.9 million, respectively.

Intangible assets and goodwill consist of identifiable intangible assets and goodwill purchased in connection with the MAC Acquisition. Intangible assets and goodwill, net, as of JuneSeptember 30, 2014 and December 31, 2013, consist of the following:

We test goodwill and intangibles for impairment in the third and fourth quarter, respectively, of every year, or more frequently if we believe indicators of impairment exist. We have not identified any impairments of goodwill or impairments of indefinite-lived intangibles as of JuneSeptember 30, 2014.

We are a U.S. taxpayer and are subject to a statutory U.S. federal corporate income tax rate of 35%. Our holding company files a consolidated U.S. federal and various state income tax returns on behalf of itself and its subsidiaries. Our effective income tax rate on our pre-tax loss was 9.2%2.5% for the three months ended JuneSeptember 30, 2014, compared to 0.0% for the comparable 2013 period. Our effective income tax rate on our pre-tax loss was 4.4%3.9% for the sixnine months ended JuneSeptember 30, 2014, compared to 0.0% for the comparable 2013 period.

The income tax benefit of $1.3$1.6 million for the sixnine months ended JuneSeptember 30, 2014 is related to the tax effects of unrealized gains credited to other comprehensive income ("OCI"). Generally, the amount of tax expense or benefit allocated to continuing operations is determined without regard to the tax effects of other categories of income or loss, such as OCI. However, an exception to the general rule is provided in ASC 740-20-45-7 when there is a pre-tax loss from continuing operations and there are items charged or credited to other categories, including OCI, in the current year. The intra-period tax allocation rules related to items charged or credited directly to OCI can result in disproportionate tax effects that remain in OCI until certain events occur. As a result of a reduction in unrealized losses credited directly to OCI during the sixnine months ended JuneSeptember 30, 2014, approximately $2.7$2.2 million of tax provision expense has been netted with current year unrealized gains in OCI, and $1.3$1.6 million of tax provision benefit was allocated to the income tax provision for continuing operations. Other benefits from income taxes were eliminated or reduced by the recognition of a full valuation allowance which was recorded to reflect the amount of the deferred taxes that may not be realized.

As of JuneSeptember 30, 2014 and December 31, 2013, we have a net deferred tax liability of $0.1 million as a result of the acquisition of indefinite-lived intangibles in the MAC Acquisition for which no benefit has been reflected in the acquired net operating loss carry forwards. The tax liability incurred at the acquisition is recorded as an increase in goodwill.

A summary of option activity under our 2012 Stock Incentive Plan during the quartersnine months ended JuneSeptember 30, 2014 and JuneSeptember 30, 2013 is as follows:

As of JuneSeptember 30, 2014, there were 109 thousand options exercised and 1.6 million options were fully vested and exercisable. The weighted average exercise price for the fully vested and exercisable options was $10.21.$10.22. The remaining weighted average contractual life of options fully vested and exercisable as of JuneSeptember 30, 2014 was 7.87.5 years. The aggregate intrinsic value for fully vested and exercisable options was $0.7 million$0 as of JuneSeptember 30, 2014. The fair value of option grants to employees is determined based on a Black-Scholes simulation model at the date of grant.

A summary of RSUrestricted stock unit ("RSU") activity in the plan during the sixnine months ended JuneSeptember 30, 2014 and JuneSeptember 30, 2013 is as follows:

At JuneSeptember 30, 2014, the 1.3 million shares of non-vested RSUs consisted of 0.50.6 million shares that are subject to both a market and service condition and 0.80.7 million shares that are subject only to service conditions. The non-vested RSUs subject to both a market

On May 8, 2014 we held our annual shareholder meeting. Our shareholders voted to approve our 2014 Omnibus Incentive Plan, which authorizes us to make 4 million shares of our class A common stock available for grant. These shares may be either authorized but unissued shares or treasury shares. On September 19, 2014, we filed a registration statement on SEC Form S-8 to register the shares authorized under the 2014 Omnibus Incentive Plan.

We issued 992.0 thousand992,000 warrants to FBR Capital Markets and Co. ("FBR") and the former stockholders of MAC Financial Ltd., upon the completion of our Private Placement and in conjunction with the MAC Acquisition, respectively. Each warrant gave the holder thereof the right to purchase one share of common stock at an exercise price equal to $10.00. The warrants were issued with an aggregate fair value of $5.1 million.

Upon exercise of these warrants, the amounts will be reclassified from warrant liability to additional paid-in capital. During the first quarter of 2014, 7.8 thousand7,790 warrants were exercised and we issued 1.1 thousand1,115 Class A common shares via a cashless exercise. Upon exercise we reclassified the fair value of the warrants from warrant liability to additional paid in capital and recognized a gain of approximately $37 thousand. No warrants were exercised during the second or third quarters of 2014.

Our insurance subsidiaries, NMIC and Re One, file financial statements in conformity with statutory basis accounting principles ("SAP") prescribed or permitted by the Wisconsin Office of the Commissioner of Insurance ("Wisconsin OCI"). NMIC's principal regulator is the Wisconsin OCI. Prescribed SAP includes state laws, regulations and general administrative rules, as well as a variety of publications of the National Association of Insurance Commissioners ("NAIC"). The Wisconsin OCI recognizes only statutory accounting practices prescribed or permitted by the state of Wisconsin for determining and reporting the financial condition and results of operations of an insurance company and for determining its solvency under Wisconsin insurance laws.

NMIC and Re One's combined statutory net loss, statutory surplus and contingency reserve as of and for the sixnine months ended JuneSeptember 30, 2014 and for the year ended December 31, 2013 were as follows:

Certain states limit the amount of risk a mortgage guaranty insurer may retain on a single loan to 25% of the indebtedness to the insured and, as a result, the portion of such insurance in excess of 25% must be reinsured. NMIC and Re One have entered into a primary excess share reinsurance agreement, effective August 1, 2012, and a facultative pool reinsurance agreement, effective September 1, 2013, under which NMIC cedes premiums, loss reserves and claims to Re One on an excess share basis for any primary or pool policy which offers coverage greater than 25% on any loan insured thereunder. NMIC will use reinsurance provided by Re One solely for purposes of compliance with these state statutory coverage limits. Currently, NMIC has no other reinsurance agreements. During April 2013, NMIC wrotebegan writing its first mortgage insurance policies and cededceding premium and risk to Re One the following month.

As of JuneSeptember 30, 2013, NMIC had six22 policies in force totaling approximately $257 thousand$1.2 million of RIF, resulting in a non-meaningful RTC ratio.ratio of 0.5:1. As of JuneSeptember 30, 2014, NMIC had $314$467 million in total risk-in-forceRIF with a RTC ratio that was less than 2:of 1.9:1, significantly below the GSE and state imposed financial requirements. The risk-to-capital calculation for each of our insurance subsidiaries, as well as our combined risk-to-capital calculation, as of JuneSeptember 30, 2014, is presented below.

NMIH is not subject to any limitations on its ability to pay dividends except those generally applicable to corporations that are incorporated in Delaware, such as NMIH. Delaware corporation law provides that dividends are only payable out of a corporation's

MI protects mortgage lenders from all or a portion of default-related losses on residential mortgage loans made to home buyers who generally make down payments of less than 20% of the home’s purchase price. By protecting lenders and investors from credit losses, we help facilitate the availability of mortgages to prospective, primarily first-time, U.S. home buyers, thus promoting homeownership while protecting lenders and helpinginvestors against potential losses related to revitalize our residential communities.a borrower's default. MI also facilitates the sale of these mortgage loans in the secondary mortgage market, most of which are sold to Fannie Mae and Freddie Mac. We are one of seven companies in the U.S. who offer MI. Our business strategy is to become a leading national MI company with our principal focus on writing insurance on high quality, low down payment residential mortgages in the United States.

We believe theThe MI industry has significant barriersis a highly regulated, capital intensive industry. Other challenges to entry due to the substantial capital necessary to fund operations and satisfy GSE requirements,include the need for a customer-integrated operating platform capable of issuing and servicing mortgage insurance policies, the competitive positions and established customer relationships of existing mortgage insurance providers, and in order to conduct MI business nationwide, the need to obtain and maintain insurance licenses in all 50 states and D.C. Additionally, the resource commitment required by mortgage originators, and larger lenders in particular, to connect to a new mortgage insurance platform, such as ours, is significant, and absent a critical need, such as the capital constraints in the MI industry during the financial crisis, they have historically, in our view, been reluctant to make such an investment. We were formed at a time when the severe dislocation in the MI industry caused by the financial crisis created a need for newly capitalized mortgage insurers and this has facilitated our efforts to establish relationships with lenders. To date, we believe we have successfully navigated the Company through many of these barriers in order to start our insurance business.

Following our formation, we focused our efforts on organizational development, capital raising and other start-up related activities. Our efforts to build our MI business have included, among other things, securing GSE approval, obtaining insurance licenses in all 50 states and D.C., building an executive management team and hiring other key officers and directors and staff, building our operating processes, and designing and developing our business and technology applications and environment and infrastructure. In 2014, we continue to make progress achieving our goals, through the addition of new customers and the attainment of our goal of becoming licensed nationwide by obtaining a certificate of authority in Wyoming in April 2014. Since we began writing MI in April 2013, we have become a fully operational MI company, with $939.8 million$1.8 billion of primary IIF and $4.9$4.8 billion of pool IIF as of JuneSeptember 30, 2014 compared to $161.7 million of primary IIF and $5.1 billion of pool IIF as of December 31, 2013. As of JuneSeptember 30, 2014, the Company had primary RIF of $220.9$435.7 million compared to primary RIF of $36.5 million as of December 31, 2013. Pool RIF as of JuneSeptember 30, 2014 and December 31, 2013 was $93.1 million.

NMIC primarily differentiates itself from its competitors by underwriting all loans it insures either prior to or post close, which permits us to provide loan originators and aggregators with 12-month rescission relief protection, thereby giving our customers dependable service and consistent confidence of coverage. We have established risk management controls throughout our organization that we believe will support our continued financial strength. As a newly capitalized mortgage insurer, we have the ability to write new business without the burden of risky legacy exposures and believe our current capital supports our current business writing strategy, while staying within the regulatory guidelines imposed by state insurance departments and the GSEs.

On July 10, 2014, the FHFAFederal Housing Finance Agency ("FHFA") released for public inputcomment the proposed PMIERs.private mortgage insurer eligibility requirements ("PMIERs"). The draft PMIERs represent the standards by which private mortgage insurers are eligible to provide mortgage insurance on loans owned or guaranteed by Fannie Mae and Freddie Mac.the GSEs. We believe that the proposed eligibility requirements for private mortgage insurers will help restore confidence in an industry affected by the recent housing crisis. We also believe a strong and financially sustainable private mortgage insurance industry is a key component of a healthy residential mortgage market and that NMIC is well positioned under the PMIERs to continue to serve the growing demand for private MIMI. The public comment period for the PMIER's closed on September 8, 2014, and we, along with other industry participants, provided comments to the FHFA, which are publicly available on the FHFA's website. Our comments, the FHFA's website and information contained on or accessible through the FHFA's website are not incorporated by reference into this report. We believe NMIC will fully comply with the new financial requirements within the transition time period, which is described below.period.

Our headquarters are located in Emeryville, California and our website is www.nationalmi.com. Our website and the information contained on or accessible through our website are not incorporated by reference into this report.

We define National Accounts as the most significant residential mortgage originators as determined by volume of their own originations as well as volume of insured business they may acquire from other originators.originators through their correspondent channels. These National Accounts generally originate loans through their retail channels as well as purchase loans originated by other entities, primarily mortgage originators who we would classify as Regional Accounts, as described below. National Accounts may sell their loans to the GSEs or private label secondary markets or securitize the loans themselves. We currently classify approximately 40 mortgage originators and/or aggregators as National Accounts. During the six months ended June 30, 2014, six of these National Accounts generated NIW, and as of June 30, 2014, we had approved master policies with 22 National Accounts. We continue to make progress with the remaining National Accounts.

The Regional Accounts originate mortgage loans on a local or regional level throughout the country. Some of these Regional Accounts have origination platforms across multiple regions; however, their primary lending focus is local. They sell the majority of their originations to National Accounts, but Regional Accounts may also retain loans in their portfolios or sell portions of their production directly to the GSEs.

During the sixnine months ended JuneSeptember 30, 2014, 96we received NIW from 189 National and Regional Accounts. The table below shows the number of these Regional Accounts generatedour customers generating NIW within each of the last six completed fiscal quarters and during the nine months ended September 30, 2014.

NMIC began writing MI in April 2013. Primary insurance may be written on a flow basis, in which loans are insured in individual, loan-by-loan transactions, or may be written on a bulk basis, in which each loan in a portfolio of loans is individually insured in a single, bulk transaction. MI may also be written in a pool policy, where a group of loans (or pool) are insured under a single contract. Pool insurance may have a stated aggregate loss limit for a pool of loans and may also have a deductible under which no losses are paid by the insurer until losses on the pool of loans exceed the deductible.

During the quarterthree months ended JuneSeptember 30, 2014, we had primary NIW of $429.9$974.9 million, compared to primary NIW of $354.3$429.9 million during the quarterthree months ended March 31,June 30, 2014. We have not written any new pool insurance in 2014. Our total NIW of $5.3 billion for the year ended December 31, 2013 consisted almost entirely of pool insurance written under our Fannie Mae pool agreement, which comprised $5.2 billion of the total NIW.

Fannie Mae Pool Transaction

We underwrite every loan we insure, including loans submitted through our delegated channel. We believe the prevailing standard of other companies in the MI industry has been to conduct partial quality assurance testing of delegated underwritten loans. We believe the industry's practice has exacerbated the negative impact of the recent mortgage crisis on legacy mortgage insurers because their partial quality control reviews did not adequately prevent the issuance of mortgage insurance through their delegated channels on ineligible, poor quality loans. Our pricing policies also help mitigate credit risk in the form of higher premium rates for loan features or borrower characteristics associated with historically higher default rates.

As part of this underwriting, we utilize certain risk principles that form the basis of how we originate primary NIW. First, we manage our portfolio credit risk by using several loan eligibility matrices which prescribe the maximum loan-to-value ("LTV") ratio, minimum borrower credit score, maximum loan size, property type and occupancy status of loans that we will insure. Our loan eligibility matrices, as well as all of our detailed underwriting guidelines, are contained in our Underwriting Guideline Manual that is publicly available on our website. Our eligibility criteria and underwriting guidelines are designed to mitigate the layered risk inherent in a single insurance policy. "Layered risk" refers to the accumulation of borrower, loan risk and property risk. For example, we have higher credit score and lower maximum allowed LTV requirements for riskier property types, such as investor properties, compared to owner-occupied properties.

Overview of NIW, IIF and RIF

A significant portion of our NIW in the first sixnine months of 2014 was comprised of single premium policies. Our single premium polices are currently written in two ways: single premium policies written on a loan by loan basis (“Single”) and single premium policies written on individual loans that are aggregated and delivered by the lender in a single transaction (“Aggregated Single”). Prior to writing Aggregated Single policies, the lender solicits single premium bids from us and other private MI companies. Because of the lower acquisition cost, the competitive bidding process and traditionally higher FICO scores associated with these policies, Aggregated Single policies have a lower premiumpremiums than our Single premium policies.

While our single premium policies (including Single and Aggregated Single) currently represent the majority of our NIW and IIF, we expect the mix of our policy type totypes could change meaningfully in future quarters with an increasing percentage of monthly premium policies.quarters. Our current long term expectation is for our total single premium polices (including Single and Aggregated Single) to collectively represent ten to twenty percent of our NIW and IIF as we expand our customer base and our business develops. Lender-paid single premiums are non-refundable and fully earned upon cancellation.

The tables on the following pages provide information on our current IIF by different metrics for the periods presented, including weighted average premiums (in basis points), FICO distributions, LTVs, premiums written and earned, average loan sizes and geographic distribution.

The table below shows NIW, IIF, RIF, policies in force, the weighted-average coverage and loans in default, and the risk in force on that defaulted loan, by quarter, for the last fourfive quarters, for our primary book.