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Future Planning Financial Strictly Mortgage |
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Borrowers who opted to carry Private Mortgage Insurance (PMI) on their homes set a record as 61,300 borrowers were at least 60 days or more on their mortgage payments. The 34.7 percent increase in defaults reflects on the inability of home owners to keep current on their loan payments. | |
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PMI gives borrowers the ability to purchase a home on one loan, avoiding a second mortgage, with less than 20 percent of a down payment. The insurance guarantees that the mortgage lender will be repaid if the borrower defaults on their mortgage. Mortgage insurers such as MGIC Investment Corp, PMI Group Inc, and Radian Group Inc were hit hardest by the defaults losing well over half of their stock value this year alone. As underwriting standard tighten, mortgages with PMI have grown increasingly popular because investors are more likely to purchase the mortgage on the secondary market if they know they will be repaid if the borrower defaults. The number of traditional policies issued totaled 153,865 in November, up 66.7 percent from a year earlier, MICA said. For January to November, the number of new policies written rose 42.3 percent from a year earlier, it said. |
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