MI Cures Outpace Defaults in February.(Mortgage Insurance Companies of America)

Washington -- For the first time in almost a year, mortgage insurance cures outpaced new defaults in February, a signal that residential credit quality may be improving.

The Mortgage Insurance Companies of America reported that 38,421 new defaults were reported by the association's six-member companies in February. The companies also reported 43,205 cures during the month.

That translates into a cure-to-default ratio of 112.5%, a sharp improvement from the 72.1% ratio seen in January, when defaults exceeded cures by 47,266 to 34,141.

The last time cures exceeded defaults was in March of 2004, when MICA reported 43,489 cures compared to 38,014 new defaults on primary mortgage insurance, for a cure-to-default ratio of 114.4%.

Companies that contribute to MICA's report are AIG United Guaranty, Genworth Financial, Mortgage Guaranty Insurance Corp., PMI Mortgage Insurance, Republic Mortgage Insurance Co. and Triad Guaranty Insurance Corp.

The primary insurance-in-force totaled $602.9 billion at the end of February, down by $14 billion from one year earlier. Pool insurance also declined modestly from one year earlier.

Applications for new insurance have also declined, reflecting ...