New Overdue Home Loans Swamp Effort to Fix Mortgages in Default

Bloomberg (05/30/08); Hamilton, Josh P.; Ivry, Bob
A new report from the Mortgage Insurance Companies of America shows that 39,584 borrowers caught up on their mortgage payments in April; but another 73,880 with privately insured loans fell behind by more than 60 days, leading some observers to wonder whether government efforts to assist distressed homeowners are working. Friedman, Billings, Ramsey Group Inc. insurance analyst Steve Stelmach says, "It's going to take awhile before you see the impact of the government's plans, if you can even see a discernable one." The report also shows a year-over-year jump of 12 percent in the value of new privately insured mortgages in April to $19.4 billion; however, over the same period, there was a 27-percent drop in new insurance policies to 108,322. In addition to boosting rates, private mortgage insurers have stopped offering coverage in California, Florida and other high-default markets and no longer work with highest-risk borrowers.