Insurance Space

NEW YORK (Reuters) – Defaults on privately insured U.S. mortgages rose 35 percent in October, and topped 80,000 for the first time, as the troubled economy caused more homeowners to fall behind on payments.

The Mortgage Insurance Cos of America on Monday said 80,071 insured borrowers were at least 60 days late on payments in February. That is up from 59,308 a year earlier, and surpassed the previous record of 76,776 set in September.

On the other hand, mortgages brought up to date totaled 43,211, up 30 percent from a year earlier and 4 percent from September, as lenders and the U.S. government stepped up remediation efforts to keep borrowers out of foreclosure.

Does mortgage insurance protect me if I’m disabled or lose my job?

No, mortgage insurance protects the lender against loss in the event that you default. You pay the premium, but the lender receives the protection. The sole benefit to you is that, with mortgage insurance, lenders are willing to make loans with down payments smaller than 20 percent of purchase price or appraised value. I should add that a few mortgage insurers have experimented with programs that provide the kind of protection to borrowers that you are asking about, but they have never caught on.

There are a number of ways to invest in for an eventual recovery in residential real estate.

Home builders are one obvious group, along with the mortgage lenders. Another way to get into position for a recovery in housing is to buy into mortgage and title insurance companies on the cheap.

George Putnam, editor of the Turnaround Letter, likes the looks of Chicago-based Old Republic International (nyse: ORI – news – people ).