According to accounts filed with ASIC, Australia’s two big mortgage insurers, Genworth and PMI had a large surge in claims by from home lenders.
Lender’s mortgage insurance (LMI) is normally required for home owners borrowing over 80% of the LVR. Should the home owner default on the loan, the insurer will pay the lender the difference between what the property is sold for and the amount owing on the mortgage, protecting the lender from large losses.
» Loan defaults on the rise – news.com, June 07, 2007.