Mortgage Informer

There’s an old saying that death cancels everything but truth. Nice sentiment, although it’s not quite right. Still owe a chunk on your mortgage when you die? Your partner, children or estate have to pay it off. That’s why mortgage life insurance is so popular.

Mortgage life insurance guarantees that your remaining mortgage will be paid off in the event of your untimely demise, but it doesn’t come cheap. It can add more than 10% to your current mortgage payment depending on the size of the mortgage and how old you are. That’s not an insignificant sum to get a little peace of mind, and critics point out that the amount paid declines along with your mortgage even though your rates stay the same.

American International Group Inc.’s mortgage insurance unit removed 45 geographic areas from its riskiest underwriting category, saying housing markets in those regions are improving.

The mortgage insurer, United Guaranty Corp., removed the locations from its list of markets where it says borrowers are more likely to default on loans, the Greensboro, North Carolina- based unit said yesterday on its Web site. United Guaranty also added two areas to the list of declining markets where it uses tighter underwriting standards on its policies.

Bond insurance unit pays $107 million dividend, company says.

AN FRANCISCO (MarketWatch) — Radian Group Inc. said on Tuesday that it’s shifting $107 million from its struggling bond insurance business to support its main mortgage insurance unit.
Radian shares slumped 24% to $1.10 during afternoon trading.
Radian Asset Assurance, the bond insurance unit of Radian RDN 1.09, -0.36, -24.8%) , was cut to A3 from Aa3 by Moody’s Investors Service last week.
The downgrade means some of the risks taken on by Radian Asset Assurance will be re-captured by customers. That means the unit will need less capital to support its remaining obligations, Radian explained.

Homeowners and lenders aren’t the only losers in foreclosure. Mortgage insurers have a lot at stake, too — and they’re doing a variety of things to keep people in their houses.

In some cases, mortgage insurers kick in cash to help borrowers catch up on their house payments. One company doesn’t even ask for the money back.

Mortgage insurers do plenty besides writing checks, though. Their other foreclosure-prevention tactics include:

# Partnering with credit counseling agencies to contact borrowers who have fallen behind on their payments.

# Stationing employees in lenders’ offices to speed up workouts.