Friday, March 21, 2008

Increased Foreclosures are causing Mortgage Insurance providers to cut back

Mortgage Insurance was designed to back up risky home loans where the borrower couldn't put up a 20% down payment. Now with home prices naturally declining in many markets, many Mortgage Insurance providers won't give mortgage insurance on Investment Properties, Second Homes, and Primary residences seeking 100% financing.

Here is a list of markets AIG defines as "declining" where Mortgae Insurance standards have increased. AIG Declining Market Report

If the Private Mortgage Insurance companies won't insure these areas, it looks like they are confident prices will continue to decline and foreclosures will continue to remain high in these areas.

1 comment:

Alan Barker said...

You know foreclosures are a problem when the insurers are cutting back. That means there not able to make any money on the Foreclosed homes