Private mortgage insurers associated with the Mortgage Insurance Companies of America (MICA) wrote $12 billion in new mortgage insurance last month.MICA members – Genworth Mortgage Insurance, Mortgage...
[Update 1: includes clarification of Radian's influence on year-on-year figures]
Defaults on privately insured US mortgages are up nearly 10% percent from one year ago.
However, defaults fell more than 3% in April from March, by way of comparison.
It marked the third consecutive month of decline in primary insurance defaults, since the 106,482 defaults seen in January. After falling more than 6% in March from February, primary insurance defaults slipped to 81,171 in April, according to data released Friday by the Mortgage Insurance Companies of America (MICA).
Defaults on privately insured U.S. mortgages fell nearly 16 percent in February from the month before, but were up 47 percent from one year ago -- and figuring out what that really means is next to impossible, given the data.
A combination of tighter underwriting guidelines and weakening borrower demand helped push the number of applications for mortgage insurance received by members of the Mortgage Insurance Companies of America, an industry trade group, to their lowest level on record in June.
Insurers received just 90,896 applications during the month, less than half of year-ago totals, and roughly 17 percent below the number of applications received in May, according to a press statement.
One large unidentified lender changed how it reports defaulted mortgages during April, pushing the number of primary insurance defaults to a record high for the month and underscoring the somewhat fragile nature of reporting on borrower defaults.
Borrowers with mortgage insurance fell more than 60 days behind on their mortgage payments at an increased pace in March, with the number of primary insurance defaults up 37 percent last month relative to year-ago numbers. The Mortgage Insurance Companies of America, a trade group comprised of most of the major private mortgage insurers, said earlier this week that 58,131 defaults were recorded in March, up from 42,362 one year earlier.
The CFPB left the grace period open-ended and most in the industry interpreted that to mean that it will last throughout the rest of 2015, at least. Unfortunately, as welcome as that grace period is, TRID remains a costly and complicated fix that has enormous implications for the whole industry..
“Bad letters damage the brand,” Katherine Porter says. “There’s a contagion effect of this. I think bad letters are unjust. They disproportionately harm the borrowers we need to help the most.” Read More