Defaults on Insured Mortgages Reach Record

The number of insured mortgages in default reached a record high in November, according to data released Monday by the Mortgage Insurance Companies of America. The trade group, which represents most of the nation’s mortgage insurers, said that number of insured borrowers falling more than 60 days late on payments jumped to 61,033 last month — up from from 45,325 one year ago and 59,308 in October.

The cure rate, defined as the number of cures relative to the number of defaults, rose slighly in November to 60.8 percent from 56.1 percent one month earlier. That number is still far below the cure rate recorded for November 2006, at 75.7 percent.

Some important points, made in an earlier post here at HW: cure rates below 60 percent are rarely seen; and the MI industry has never recorded an annual cure rate below 79 percent, according to available data.

With today’s report, the 12-month moving average now stands at just 68.6 percent.

MI application activity dropped in November, as well, with MICA members reporting 173,259 applications, 5.6 percent less than the 183,659 received in October. The dollar volume of primary insurance written on newly originated 1-to-4 family conventional mortgage loans totaled $24,163.1 million in November, a 7.9 percent decrease from the previous month’s $26,260.5 million.

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