Mortgage picture darkens

NEW YORK – In all phases of the mortgage industry this week, from the people who make the loans to the people who insure them, the news was bad – and most of them expect it to get worse.

Things have gotten so tough, title insurer Stewart Information Services Corp. said it could not cut costs fast enough in August and September to keep up with the plummeting market. The company has already made “significant reductions” in its work force in October.

The market turned quickly for mortgage insurer MGIC Investment Corp. as well, as the rising delinquencies forced the company to pay out more in claims in the third quarter. MGIC said it expects to lose money through 2008 because it estimates it will pay billions in claims. MGIC Investment already posted a loss of $372.5 million in the third quarter.

And Countrywide Financial Corp., the nation’s largest mortgage lender, said it lost $1.2 billion over the summer, as the amount of money it set aside to cover losses from loans gone bad skyrocketed.

For potential mortgage borrowers, the comments paint a sobering picture of the difficulty in getting a new home loan in the coming months.

“If your credit scores are low, your access to mortgage money has all but vanished,” said Dan Green, a certified mortgage planning specialist and author of TheMortgageReports.com.