As PMI Use Grows, Defaults on Insured Loans Increase
Mortgage Insurance Companies of America reported yesterday that 154,537 borrowers used private mortgage insurance (PrivateMI) to buy or refinance a home in December, up 48.6 percent from November's total of 103,934. Unfortunately, the number of insured borrowers who managed to default on their loans also increased, reflecting the continuing slump U.S. housing markets. The number of PrivateMI applications received in December by MICA members was 158,937, 45 percent more than the 109,590 received just one month prior. The dollar volume of primary insurance written on newly originated 1-to-4 family conventional mortgage loans totaled $27,341.9 million in December, a 53.5 percent increase from the previous month's $17,806.7 million. Traditional primary insurance totaled $13,112.8 million and bulk primary insurance totaled $14,229.1 million in December. In that same month, primary insurance in-force totaled $668,398.9 million. MICA members reported 32,177 cures and 46,921 defaults during December. The associated cure ratio, 68.6 percent, was the worst cure rate reported for all of 2006. The number of defaults reported was up 3.5 percent from November, and represented the highest number of reported defaults since January 2006. The statistics in the report included data from the following companies: AIG United Guaranty, Genworth Mortgage Insurance Corporation, Mortgage Guaranty Insurance Corporation, PMI Mortgage Insurance Co., Republic Mortgage Insurance Company and Triad Guaranty Insurance Corporation. MICA is the trade association representing the private mortgage insurance industry, and can be found on the web at http://www.privatemi.com.