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Mortgage Defaults Climb Again
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Published: September 29, 2007
More American homeowners are missing mortgage payments, pushing defaults on privately insured home loans up 30 percent last month from year-earlier levels, according to a trade group.
Borrowers more than 60 days behind rose to 58,441 in August, Washington-based Mortgage Insurance Companies of America said Friday on its Web site.
The report bolsters data that show the worst U.S. housing slump in 16 years may be getting deeper. Foreclosures set a record in the second quarter, according to the Mortgage Bankers Association. Also, last month lenders sent a record 108,716 notices of default, auction or repossession, RealtyTrac Inc. reported.
Fannie Mae Chief Executive Officer Daniel Mudd said the slump will last beyond 2008, increasing credit losses.
'These defaults are a lagging indicator, so they're probably going to get worse from here,' said Michael Darda, economist at Greenwich, Conn.-based equity trading firm MKM Partners LP.
Mortgage insurers, which reimburse home lenders when borrowers don't pay, have stumbled in stock market trading as the record defaults increased claims.
MGIC Investment Corp., the largest U.S. mortgage insurer, lost about half its value this year. PMI Group Inc., the second-largest, lost more than 30 percent. Third-ranked Radian Group Inc., the insurer whose acquisition by MGIC was scuttled, has fallen almost 60 percent.
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