Well folks, we may rougher roads ahead.  With all of the Sub-Prime and now Alt-A loan defaults, everyone has been focusing on foreclosures and homeowners not being able to make there adjusted payments.  When a Mortgage Bank takes loss on a property do they really lose?  Well, yes and no.  Don't forget Mortgage Companies or the note holder are insured against default by this MaGIC, I had to do it, little thing called Mortgage Insurance that everyone hates!!!  So with the record number of defaults and foreclosures, ultimately who do you think, besides the homeowner, is suffering the biggest loss?  The Mortgage Insurance companies.  Now as we all know, when insurance companies take losses, guess who pays.  The insurance consumer.  This story outlines some of the problems that the MI companies are having.  The buzz in the Mortgage Industry is that because of heavy losses, the MI companies may max their policies at 90% of the homes value.

Mortgage Insurer's Deal in Doubt
New York Times (08/08/07) P. C5
MGIC Investment is considering scrapping its deal to acquire Radian Group a week after the two mortgage insurers disclosed problems involving subprime mortgage investor C-Bass, their $1 billion partnership. Banks have made margin calls on C-Bass' credit lines due to the spike in delinquencies and defaultson subprime mortgages, and now the valueof MGIC's and Radian's investments in C-Bass may be virtually zero. MGIC has agreed to acquire Radian for $4.9 billion in stock in a deal that would create a combined company with nearly $15 billionin total assets. In light of the new developments, however, MGIC is seeking more information from Radian so that its board of directors can determine whether or not to proceed with the acquisition.