Defaults on privately insured U.S. mortgages rose 38.1 percent in February, as a growing number of homeowners failed to keep up with their loan payments.
The Mortgage Insurance Companies of America Monday said 60,911 insured borrowers were at least 60 days late on payments in February. That is up from 44,111 a year earlier, but down 11.7 percent from January’s record 68,950.
Defaults have topped 60,000 for four straight months, a level not previously reached since data were first tabulated in 2001. Late payments are often a precursor to foreclosure.
Private mortgage insurance lets people buy homes with down payments of less than 20 percent and guarantees lenders will be repaid even if borrowers default.
Lenders nationwide have been tightening their underwriting standards, forcing prospective homeowners either to put more money down, to find new means to borrow, to buy less costly homes or defer purchases altogether.
U.S. foreclosure filings in February soared 59.8 percent from a year earlier, real estate data firm RealtyTrac Inc. said on March 13.
On March 27, Radian Group Inc., one of the largest mortgage insurers, said its main unit would no longer insure home loans where borrowers cannot document income or assets, citing the loans’ “poor performance.”
Such loans are often known as “liar loans” because they can allow borrowers to overstate their financial health.
The number of traditional mortgage insurance policies issued was 138,854 in February, up 41.8 percent from a year earlier, Washington, D.C.-based MICA said.
The amount written was $19.1 billion, up 50.9 percent from a year earlier, but the fewest in 10 months.
On the other hand, primary insurance in force rose 24 percent from a year earlier to $839.6 billion.
MICA compiles its data from information provided by six of the seven largest U.S. mortgage insurance providers: American International Group Inc.’s United Guaranty Corp., Genworth Financial Inc., MGIC Investment Corp., Old Republic International Corp., PMI Group Inc. and Triad Guaranty Inc. Radian is not included.
(Editing by Maureen Bavdek)
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