When people are financing homes with less than 20% down, they must have mortgage insurance. It comes in the form of government-backed FHA mortgage insurance or private mortgage insurance which is controlled by a few large companies. Those companies have had a rough road during the housing bust. Here’s the latest good news and bad news on private mortgage insurers.
The good news is that private mortgage insurance defaults declined last month, according to the Mortgage Insurance Companies of America’s (MICA) monthly report. Private mortgage insurance companies reported September defaults fell to 38,719 from 48,187 the previous month.
The bad news is that new biz is down 29%: private mortgage insurers represented by MICA wrote $4.9 billion in new business September, down 29% from $6.9 billion the same month a year ago. The group (which is made up of MGIC, Radian, RMIC, PMI, and Genworth; not listed on its website are Essent and UG) had $477 billion in primary insurance in force in September. That is down 38% from nearly $773 billion in September 2010.