As the headline of this Bloomberg.com story (http://www.bloomberg.com/apps/news?pid=20601103&sid=api7SbPeUP3Q&refer=us) indicates, things are NOT good in the residential mortgage world, which will further add to the financial distress arising from the real estate market crash. Not that Mike Huckabee (or the Chimperator) would know since he seems increasingly out of touch with issues that he ought to know about. I guess he is too busy condemning gays and has not had a chance to notice. Here are some story highlights:
Defaults on privately insured U.S. mortgages rose 35 percent in November to a record, an industry report today showed, adding to evidence the U.S. housing slump is deepening. The number of insured borrowers falling more than 60 days late on payments jumped to 61,033 last month from 45,325 in November 2006, according to data from members of the Washington- based Mortgage Insurance Companies of America. The missed payments, often a prelude to foreclosure, represented a 2.9 percent increase from October.
Continued deterioration is likely to spur higher claims. And higher claims activity may result in some companies needing to raise money.'' Home prices fell 6.1 percent in 20 U.S. metropolitan areas in October, according to S&P/Case-Shiller. Mortgage insurance compensates lenders for losses on bad loans as falling home prices make it harder for borrowers to refinance.
Bond insurers including MBIA Inc. and Ambac Financial Group Inc. are struggling to maintain credit ratings needed to guarantee debt after losses on mortgage-backed bonds they covered. Fitch has given MBIA and Ambac less than six weeks to each raise $1 billion or face loss of their AAA ratings. MBIA on Dec. 10 said it will get $1 billion from private- equity firm Warburg Pincus LLC to bolster its capital and Ambac took out reinsurance on $29 billion of securities it guarantees.