WASHINGTON -- Defaults on privately insured U.S. mortgages rose 37 percent in March from a year earlier for their 15th straight increase, according to an industry report released Wednesday.
The number of insured borrowers more than 60 days late on payments rose to 58,131 last month from 42,362 a year earlier, the Mortgage Insurance Companies of America said.
Mortgage insurers pay lenders when homeowners default and foreclosures fail to cover costs.
The new data show the U.S. housing slump isn't over.
Foreclosure filings more than doubled in the first quarter as payments rose for subprime adjustable mortgages and falling home prices left property owners unable to sell or refinance without losing money, according to RealtyTrac Inc., a provider of foreclosure data.
The top three mortgage insurers have lost more than three-quarters of their market value in the past year.
"Defaults will continue to rise throughout 2008," said Steve Stelmach, an analyst at Friedman, Billings, Ramsey Group Inc. (NYSE: FBR) in Arlington, Va. "Investors are beginning to get comfortable with the fact that defaults are going to worsen."
The number of new policies issued to homeowners in the month rose to 138,782, a 2.5 percent increase from a year earlier, as lenders sought protection against further losses.
Mortgage insurers say they've tightened underwriting standards and raised prices as demand for the coverage grows.
Congress, the Bush administration and regulators have urged lenders to renegotiate terms for borrowers so they can stay in their homes, easing a glut of empty houses. Almost 650,000 properties were in some stage of foreclosure during the quarter, Irvine, Calif.-based RealtyTrac said Tuesday. That's 112 percent more than a year ago.
The percentage of homeowners with private mortgage insurance who got payments back on schedule improved from a month earlier. The number of so-called "cures" grew to 50,585 in March.
Home prices in 20 U.S. metropolitan areas fell in February by the most on record, increasing the possibility that lenders would need to turn to mortgage insurers to recover their costs when they foreclose.
"We're going to go another two quarters of sort of monitoring the data to see if there's any indication of further decay, which in all likelihood there will be," said Michael Grasher, an analyst with Piper Jaffray & Co. (NYSE: PJC) in Chicago.
MGIC (NYSE: MTG) lost $34.4 million in the three months ended March 31, its third consecutive unprofitable quarter.
The insurer last month raised about $840 million by selling stock and convertible debt after a record fourth-quarter loss.
PMI (NYSE: PMI) and Radian (NYSE: RDN) have also said they are seeking new capital and are no longer selling policies to the riskiest borrowers. PMI and Radian have not announced first-quarter results.
Genworth Financial Inc. (NYSE: GNW) said its mortgage insurance unit lost $36 million in the first quarter as claims and expenses cost $1.67 for every dollar it collected in premiums.
The company, which also sells life insurance and long-term care coverage, said profit fell 64 percent overall.
The Mortgage Insurance Companies of America data understate the total number of defaults as they are drawn from six of the seven biggest U.S. mortgage insurers, excluding non-member Radian.