Private mortgage insurers have been hit hard by the skyrocketing number of foreclosures over the past two years, but the market was spared the worst of the subprime crisis because many lenders concocted gimmicky loan deals to circumvent mandates to buy coverage, experts in the field say.
“The mortgage insurance industry is doing exactly what it was intended to do,” according to Rick Gillespie, senior vice president of corporate communications at mortgage insurer Radian.
“Obviously, the companies that comprise the mortgage insurance industry are experiencing the same housing and credit challenges as everyone,” he said, noting there have been about $15 billion in claims over the last couple of years. “But the claims have been paid. Each company is dealing with it a little bit differently from a capitalization and liquidity standpoint.”
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