As unemployment and home foreclosures continue to rise and threaten the economic recovery, the mortgage insurance industry is stepping up its ongoing efforts to keep families in their homes.
According to a statement from the ""Mortgage Insurance Companies of America"":http://www.privatemi.com/ (MICA) the industry has been at the forefront in developing systems and procedures to support the administration’s Home Affordable Refinance Program (HARP) and Home Affordable Modification Program (HAMP). While these programs are in their early stages, MICA says initial results have been encouraging.
In partnership with Fannie Mae and Freddie Mac, the mortgage insurance industry is working alongside servicers to modify or refinance troubled loans under the HARP and HAMP programs. Some mortgage insurers have also developed back-up underwriting capabilities and standardized reporting systems to provide distressed homeowners a ""second look"" if they have been turned down for a loan modification on a non-GSE loan.
Kevin D. Schneider, MICA’s president, said, ""It is more vital than ever for the housing finance industry to do its part to create stability in the marketplace. MICA's members are working closely with borrowers, lenders, investors, credit counselors, and government agencies to modify or refinance existing loans to make them more affordable.""
Schneider noted, ""In 2008 alone, mortgage insurers, working with servicers, were able to save almost 100,000 people from losing their homes. The total sum of those mortgage workouts was nearly $18 billion.""
Suzanne C. Hutchinson, EVP of MICA, added that mortgage insurers are pulling out all the stops to help stem the tide of foreclosures and are prepared to complete an increasing number of loan workouts in the coming months in support of the government’s housing programs.
MICA's members have also adopted the recently announced guideline changes that allow up to 125 percent loan-to-value ratios for refinancing mortgages that are HARP eligible. That higher LTV level is expected to help more underwater borrowers secure a lower monthly payment.
During the last year, MICA said its members have helped nearly one million families save money by buying or refinancing a home with less than the traditional 20 percent downpayment. In addition, private mortgage insurance premiums are now tax deductible for many borrowers who purchase or refinance a home.
The industry group says the interests of borrowers, mortgage insurers, and investors are aligned because unnecessary foreclosures harm everyone: families lose their home, the mortgage insurer pays a claim, and the investor has a financial loss. However, MICA added, when every alternative is exhausted and a foreclosure cannot be avoided, mortgage insurers stand ready to pay all valid claims.