From Banking Day:
Claim levels on the mortgage insurer Genworth Financial remain “elevated”, the company said yesterday.
Claims by insured home-loan funders were A$71 million in the December 2012 quarter, down from $81 million in the September quarter.
Claim hot-spots remain loans advanced to borrowers in Queensland and also to small business owners and the self-employed.
Genworth also said new business climbed 20% in the quarter, rather at odds with the collapse in first home buyers but there you go.
Meanwhile, the recent Moody’s downgrade to the LMI sector is flowing through to RMBS. Also from Banking Day:
Moody’s Investors Service’s downgrade of the financial strength ratings of lenders’ mortgage insurance companies will percolate through to reduced credit ratings on some senior mortgage-backed bonds issued by Bendigo Bank, Heritage Bank, ING Direct, Interstar, National Australia Bank and Westpac.
“Genworth also said new business climbed 20% in the quarter, rather at odds with the collapse in first home buyers but there you go.”
Does that mean new FHBers really have no deposit?
Hard to tell – it could as easily be a switch between QBE and Genworth or banks not self insuring between 80 and 85% for example.
Could it be people worried about their jobs taking out mortgage insurance to tide them over if the worst happens?
Upgraders requiring LMI?
If unemployment rises to X the losses to Genworth and QBE would equate to entire market capitalisation of the LMI insurers.
Does any know what X is, I can’t seem to find the stat or the fact that was posted on this site some time ago.
Thanks!