The number of private mortgage insurance policies sold in October reached a record low as the housing downturn persisted and sellers tightened standards to combat continuing losses.

The number of homeowners buying policies fell 76% from a year earlier, to 42,167, the lowest since 2001, when the Mortgage Insurance Companies of America changed the way it reports data, the trade group said Monday.

The insurance, which pays lenders when homeowners default, is typically required when a borrower makes a down payment of less than 20% on a home.

Mortgage insurers have faced mounting losses this year as a record number of homeowners proved unable to keep up with payments. In October the number of homeowners who defaulted on privately insured mortgages reached 80,071, almost twice the number who caught up on their house payments and the most since the trade group changed its methodology for tallying the figure in April.

This year insurers have tightened underwriting standards and raised prices to counter the losses. October home resales fell 1.6% from a year earlier.

Until last year private mortgage insurance was one of the most profitable types of coverage sold by insurers. From 2004 to 2006 members of the Mortgage Insurance Companies of America reported a profit margin of at least 35 cents for every dollar they collected in premiums.

In contrast, auto insurers made less than 5 cents on every dollar in 2006, according to A.M. Best Co.

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