In the worst housing slump since the Great Depression, 67,967 people fell at least 60 days behind on mortgages, compared with 40,687 who got back on track, the Mortgage Insurance group reported today. Borrowers who put down less than 20 percent of the purchase price for their homes are often required to buy insurance that pays lenders if they default.
"There's no doubt that 2008 is going to continue to be a challenging year,'' said Michael Fraizer, chief executive officer of Genworth Financial Inc., the fourth-largest U.S. mortgage insurer, at a conference in London last week.
The results may add urgency to efforts by U.S. lenders to increase the pace of mortgage modifications amid criticism they haven't done enough to help owners keep homes. The housing slump has led to record losses for the insurers that supply the trade group's data. Each of the top seven U.S. mortgage insurers posted a loss on the business in at least two of the past three quarters.
Defaults, often a precursor to foreclosure, can't be compared with a year earlier because one lender changed the way it calculates figures in April, the mortgage insurance group said, without identifying the company. Foreclosures rose 48 percent in May from a year earlier, according to data released by Irvine, California-based RealtyTrac Inc. earlier this month.