Industry News

Private mortgage insurance defaults rise

Use of PMI up more than 37% in 2007

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Issuance of private mortgage insurance policies fell by 7.6 percent in November compared to the month before, even as defaults continued to climb. That's according to the latest numbers from a trade association representing the private mortgage insurance industry, the Mortgage Insurance Companies of America (MICA). Primary insurance defaults totaled 61,033 in November, MICA said, up 2.9 percent from October and a 34.6 percent increase from the 45,325 defaults recorded in November 2006. Some 161,957 private mortgage insurance policies -- which lenders typically require when borrowers make down payments of less then 20 percent on a home purchase -- were issued in November. That's down from the October total of 175,383, but represents a 55.8 percent increase from the same month a year ago, MICA reported. The use of private mortgage insurance grew dramatically in 2007 as lenders cut back on the use of "piggyback" second mortgages, and a change in the tax code allowed some families to dedu...