Although everybody hates mortgage insurance (MI or PMI as it is known) we’ve once again become dependent upon it. Those who have recently purchased homes know that the 2nds used in “80-10s” and “80-20s” to avoid mortgage insurance are gone.
But have the MI companies ignored the risks in their excitement about being invited to the dance? Let’s hope not.
Here’s an interesting article to check out:
Strains Evident on Mortgage Industry’s Line of Defense Claims skyrocket at MGIC; losses expected for ‘08
American Banker / By Harry Terris
October 18, 2007
In a sign of just how severe residential credit losses are getting, MGIC Investment Corp., the largest mortgage insurer, posted a third-quarter loss of $372 million Wednesday, projected a staggering increase in claim payments, and said it expects to continue to lose money through next year. Citing an unexpectedly rapid deterioration of conditions in California and Florida and continued weakness in the Midwest, the Milwaukee company said it expects home prices across the country to drop 10% over the next 18 months.
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