New Mortgage Insurance Applications Up In June From May

   DOW JONES NEWSWIRES 
 

New residential mortgage insurance applications rose in June from a month earlier, but the number was the second-smallest in the past seven months, according to a survey of the biggest private mortgage insurers.

Mortgage defaults grew slightly in June from May while cures fell in the same period. Defaults and cures remain elevated from a year earlier, though defaults have fallen from the highs in December and January and cures are lower than in February and March.

Insurers received 56.3 million new applications for mortgage insurance in June, up 1.5% from May but 38% below June 2008.

New insurance written grew 11% to $7.65 billion in June from May but fell 44% from a year earlier.

The total amount of mortgage value that is covered by private mortgage insurance was $915.1 billion in June, with insurance typically guaranteeing a portion of that amount. In June, total insurer exposure was $209.6 billion.

Covered mortgages that went into default, or became at least two months overdue, rose 0.5% to 88.4 million in June from May and jumped 30% from a year earlier.

Defaulted mortgages that cured, or were brought current after being at least two months overdue, fell 1.3% to 51.9 million in June from a month earlier but were 20% more than in June 2008.

Mortgage insurance protects lenders from losses on defaulted mortgages and is typically required on mortgages obtained with less than a 20% down payment. Industry estimates are that about 75% of new mortgages carry either public or private mortgage insurance, with federally funded guarantees covering about 70% of covered mortgages and private mortgage insurance covering the rest.

The figures are collected by Mortgage Insurance Companies of America and includes data from United Guaranty, a unit of American International Group (AIG); Genworth Mortgage Insurance, a unit of Genworth Financial Inc. (GNW); Mortgage Guaranty Insurance Corp. (MTG); PMI Mortgage Insurance Co., a unit of PMI Group (PMI); Radian Guaranty, a unit of Radian Group Inc. (RDN); and Republic Mortgage Insurance Co., a unit of Old Republic International Corp. (ORI).

- By Kathy Shwiff, Dow Jones Newswires; 212-416-2357; [e-mail]