The most recent MICA data release points to continued improvement in the distressed mortgagor credit. The improvement in the January cure rate of 78.6% versus 68.1% a year ago was driven by a steep decrease in new defaults, partially offset by fewer cures. In our view, this represents a stabilized housing market and improved economy on the default side and the inevitable digestion of the foreclosure glut and expiration of HAMP on the cure side.
While uncertainty remains extreme regarding the ultimate sorting out of the shadow inventory, data points like this show that positive developments are more than possible. The potential for positive developments has also been highlighted by the recent rumors of foreclosure settlement talks between government authorities and securitization servicers.
January applications for private mortgage insurance were also up 32.7% versus a year earlier. Among other things, this reflects the price increase implemented by the HFA. Continued high quality market share growth will help insurers write themselves into better financial health. For that reason, The Blue Dragon plans to make a spreadsheet to track applications and policies issued in a similar manner to how we already track defaults and cures.
But for now, the most recent default and cure data has been added to the existing spreadsheet here.