The problems in the private mortgage insurance industry may get worse before they get better, analysts at Fitch Ratings say, with loans insured in 2007 showing "significantly higher levels" of first-year delinquencies than the 2006 and 2005 "vintages." In their most in-depth report on the mortgage insurance industry this year, Fitch analysts said that even though mortgage insurers instituted tighter underwriting standards in 2007, most of the changes did not completely go into effect until the first quarter of 2008 (see story). In addition, because of the decline in "piggyback" second loans, a greater proportion of loans insured in 2007 had high initial loan-to-value ratios in which with borrowers put less than 5 percent down -- which could magnify claims. "In Fitch's view, 2007 will likely prove to be one of the worst underwriting years in the modern history of the U.S. mortgage industry," the report said. "Unfortunately, ...
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