DOW JONES NEWSWIRES
New residential mortgage insurance applications rose in June
from a month earlier, but the number was the second-smallest in the
past seven months, according to a survey of the biggest private
mortgage insurers.
Mortgage defaults grew slightly in June from May while cures
fell in the same period. Defaults and cures remain elevated from a
year earlier, though defaults have fallen from the highs in
December and January and cures are lower than in February and
March.
Insurers received 56.3 million new applications for mortgage
insurance in June, up 1.5% from May but 38% below June 2008.
New insurance written grew 11% to $7.65 billion in June from May
but fell 44% from a year earlier.
The total amount of mortgage value that is covered by private
mortgage insurance was $915.1 billion in June, with insurance
typically guaranteeing a portion of that amount. In June, total
insurer exposure was $209.6 billion.
Covered mortgages that went into default, or became at least two
months overdue, rose 0.5% to 88.4 million in June from May and
jumped 30% from a year earlier.
Defaulted mortgages that cured, or were brought current after
being at least two months overdue, fell 1.3% to 51.9 million in
June from a month earlier but were 20% more than in June 2008.
Mortgage insurance protects lenders from losses on defaulted
mortgages and is typically required on mortgages obtained with less
than a 20% down payment. Industry estimates are that about 75% of
new mortgages carry either public or private mortgage insurance,
with federally funded guarantees covering about 70% of covered
mortgages and private mortgage insurance covering the rest.
The figures are collected by Mortgage Insurance Companies of
America and includes data from United Guaranty, a unit of American
International Group (AIG); Genworth Mortgage Insurance, a unit of
Genworth Financial Inc. (GNW); Mortgage Guaranty Insurance Corp.
(MTG); PMI Mortgage Insurance Co., a unit of PMI Group (PMI);
Radian Guaranty, a unit of Radian Group Inc. (RDN); and Republic
Mortgage Insurance Co., a unit of Old Republic International Corp.
(ORI).
- By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com