Here’s one sliver of good news for the private mortgage insurers.
Last month, the Mortgage Insurance Companies of America (MICA), which includes most of the largest mortgage insurers, saw defaults decrease for the first time since June.
A total of 89,722 primary insurance defaults were reported during February, markedly higher than the 60,911 seen a year ago, but well below the 106,484 in January.
At the same time, primary insurance cures (where delinquent mortgages become current) jumped significantly between January and February.
During the month, 67,767 borrowers got back on track some way or another, up from 51,093 in January and 47,933 a year ago.
“Mortgage insurers are playing a crucial role in stabilizing the housing market,” said Suzanne C. Hutchinson, Executive Vice President of MICA.
“Our members continue to work with borrowers, lenders and government agencies to prevent foreclosures and keep people in their homes.”
Unfortunately, demand for mortgage insurance continues to be soft/challenged, with just 73,109 PMI applications received in February, less than half the amount seen a year earlier.
Meanwhile, actual policies issued during the month totaled just 56,216, nowhere close to the 139,077 issued in February 2008.
This can partially be attributed to stricter underwriting guidelines that limit what and how much can be insured.
Last month, MGIC banned PMI on second homes, manufactured homes, and cash-out refinances, while making it trickier for third-party originators to apply for mortgage insurance.
PMI said outright that third party originations (mortgage broker originated loans) would be ineligible for private mortgage insurance, while also banning construction-to-perm loans, two-unit properties, interest-only loans.
Questions were also raised about the role of private mortgage insurance after the Obama Administration announced plans for Fannie and Freddie to back mortgages up to 105 percent loan-to-value.
MICA includes data from AIG United Guaranty, Genworth Mortgage Insurance Corporation, Mortgage Guaranty Insurance Corporation, PMI Mortgage Insurance Co., Radian Guaranty and Republic Mortgage Insurance Company.
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(photo: littledan77)
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