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Insured mortgage defaults top 80,000 in October
NEW YORK (Reuters) - Defaults on privately insured U.S. mortgages rose 35 percent in October, and topped 80,000 for the first time, as the troubled economy caused more homeowners to fall behind on payments.
The Mortgage Insurance Cos of America on Monday said 80,071 insured borrowers were at least 60 days late on payments in February. That is up from 59,308 a year earlier, and surpassed the previous record of 76,776 set in September.
On the other hand, mortgages brought up to date totaled 43,211, up 30 percent from a year earlier and 4 percent from September, as lenders and the U.S. government stepped up remediation efforts to keep borrowers out of foreclosure.
Late payments are often a precursor to foreclosure. MICA, a Washington, D.C. trade group, has tabulated insurance default data since 2001.
"Residential real estate is under incredible stress," said Roger Merritt, a managing director at Fitch Ratings in New York. "Mortgage insurers can review claims they pay out to make sure they are appropriate. If loans were improperly documented or fraudulent, they may not require payouts. But there is little that mortgage insurers can do about foreclosure rates."
Private mortgage insurance lets people buy homes with down payments of less than 20 percent and guarantees that lenders will be repaid even if borrowers default.
But falling home prices are leaving more borrowers with negative equity, and Federal Reserve Chairman Ben Bernanke said on Monday that low demand and an increased number of distressed properties are pushing housing prices even lower.
U.S. foreclosure filings in October totaled 279,561, up 25 percent from a year earlier, real estate data firm RealtyTrac Inc said. Meanwhile, prices of single-family homes in September fell a record 17.4 percent, according to the S&P/Case-Shiller Home Price Indices.
MICA said the number of traditional mortgage insurance policies issued in October sank 76 percent to 42,167, while applications for insurance fell 70 percent to 55,085. Primary insurance in force rose 1 percent to $800.9 billion.
The group compiles data provided by five U.S. mortgage insurance providers: American International Group Inc's United Guaranty Corp, Genworth Financial Inc, MGIC Investment Corp, Old Republic International Corp and PMI Group Inc.
Radian Group Inc and Triad Guaranty Inc are not included. Year-earlier MICA data included Triad.
(Reporting by Jonathan Stempel; editing by Richard Chang)
