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Solid improvements in the US housing market has led the American International Group’s (AIG) mortgage insurance sector to reduce its underwriting list of the riskiest insurance areas.
AIG’s mortgage insurer United Guaranty removed 45 areas from its list of locations that are considered to be high risk in terms of mortgage delinquencies by borrowers.
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According to a report in The Australian Financial Review, United Guaranty senior vice president Steve Buisson said the revision came as a result of the improving housing market in those regions.
“Some markets have begun to show signs of maybe reaching a trough,” Mr Buisson said.
“In general, we will see a very slow recovery but, more importantly, it’s the fact we are reaching the bottom on average. We still have a long way to go in some parts of the country,” he said.
United Guaranty created its declining markets list in February 2008 when the number of borrowers defaulting on their home loans surged as a result of the global financial crisis.
According to Mr Buisson, the list considered factors such as housing supply and demand, unemployment, house sale prices, among others, to evaluate US regional housing markets.
