Posted by Ryan Ward on Monday, October 07, 2013 at 5:23 PMBy Ryan Ward / October 7, 2013Comment
As we enter the 4th quarter, it's a good idea to look back at the end of the 3rd quarter for signs of what we can expect for the remainder of the year. For all of the hype about the newly improved real estate market, there are some strong signs we have slowed down considerably. Here are some quick numbers I just ran for Metro Atlanta and some of the more sought after areas around the city. It certainly does not indicate a strengthening seller's market. Combine these numbers with several consecutive months of increasing inventory and we are looking at starting 2014 more like 2013 than most of us would have hoped.
Now, this isn't necessarily a bad thing, it's just that some of the gains we saw starting in the Spring of 2013 were too dramatic to be sustainable. For example, when we see home prices increase by double digit percentages in a six month period, we are movning too fast. Let's not forget what we are finally climbing out of so a little balance might be just what the market needs to maintain long term sustained growth:
Demand This Year:
30 days back = 3,576 homes sold
31 - 60 back = 5,005 homes sold
61 - 90 back = 5,607 homes sold
91 - 120 back = 5,346 homes sold
Demand Last Year for the Same Time Period:
Last year 30 days back = 4,687 homes sold
Last year 31 - 60 back = 5,204 homes sold
Last year 61 - 90 back = 5,351 homes sold
Last 91 - 120 back = 5,343 homes sold
This year, last 30 days back for all sales over $100,000 = 2,851
Last year, last 30 days back for all sales over $100,000 = 2,914
So, for all homes over $100,000 this year compared to...
Posted by Ryan Ward on Tuesday, August 20, 2013 at 7:16 PMBy Ryan Ward / August 20, 20133 Comments
Homes are selling in 3 days! Rates are going up! It's a great time to buy!!!
All three of those statements are generally true, but they don't really tell you what's going on in its entirety and they certainly don't give you enough information to make an informed decision. They are good talking points, but there is a lot more going on behind the scenes than these three statements make it out to be so I will try to address each one individually.
Homes are selling in 3 days - partially true. Some homes are selling in 3 days, but certainly not all of them. If your home is priced correctly for its condition and location, the average days on market is about 15 days. What's interesting about this is that it doesn't matter what price point we are talking about. In fact, it really doesn't matter which moment in time we are talking about either - even the worst part of the latest downturn in the market. In my view, this is really the first fundamental law of real estate (no, it isn't location because if it isn't priced right for it's condition, it won't sell). If there is a market for your home and it is priced correctly for its condition and location and marketed properly, it will sell in about 2 weeks. For homes between $500,000 and $1,000,000 it's about 21 days and for homes between $1,000,000 and $2,000,000 it's about 28 days and above that all bets are off because the actual market for these homes is quite small (except for Buckhead where the price may be closer to $3,000,000). The question really is what price will it sell for. See chart for more details about days on market. I see these charts every quarter and they just don't change.
Rates are going up - says who? Have you paid any attention to the economy lately?...
Posted by Ryan Ward on Wednesday, March 20, 2013 at 8:57:06 PMBy Ryan Ward / March 20, 20134 Comments
Real estate has always been cyclical and it's no different right now. What is different is how quickly the scale has changed directions this time. We are in a stage where the reality of market conditions has shifted much faster than the mentality of many buyers in the market today. In my view, this abrupt shift occured due to fewer distressed sales coming on the market, slightly higher sales volume and the fact that many homeowners who would like to sell are still upside down. Prices are rising, but it will be some time before we get back to peak prices we saw in 2007.
What most buyers are finding out as they enter the market today is that this is definitely not a buyers market. Not only is it not a buyers market, but the lack of inventory to choose from becomes frustrating to them very quickly.
Where are those deals? I thought this was a buyer's market? What's happened???
The deals are gone unless you are looking in the $100,000 price range.
This is worth repeating. The deals are gone.
There are fewer foreclosures and short sales are selling for what they are worth because banks are not just getting rid of them anymore and many sellers still can't sell. What that means for buyers is that they jump in to the market, take their time, find a house, make a low offer and then see someone else buy the house out from under them. It usually takes losing one or more homes before a buyer will believe their agent that the market has changed. The sooner they believe, the sooner they will be in a new house.
If we take a look at the numbers in a few different areas, we can really begin to see the shift...
In the area of Fulton county north of the Chattahoochee River, there are 159 foreclosures and short sales on the market. Of those 159 homes,...
Posted by Ryan Ward on Saturday, February 16, 2013 at 9:02:29 AMBy Ryan Ward / February 16, 20131 Comment
A disappointing day to hear that Google, the world's leading search engine has decided to use Zillow, one of the world's most innacurate real estate listing sites, to power its real estate search on Android mobile devices. For a company that prides itself on presenting the best and most accurate data to consumers, they've made a terrible mistake. Studies have shown that the accuracy of the information on Zillow to be genuinely inferior to that of websites powered by local MLS systems like Realtor.com and local real estate websites. Take a look at this study by WAV Group that shows just how innacurate the data on Zillow is compared to 3 real estate brokerage website. The listing data on my website right here is a far more accurate way to search for Atlanta homes for sale. We pull directly from the MLS everyday which means we have the listings first and when they sell we remove them first. Just take a look at the study above and you will see for yourself.
The technology for this new partnership isn't great, or even new. I have had it on my Atlanta Real Estate app in the iTunes App store for a year myself and I'm just one team in one market. I certainly don't have the vast resources of Zillow or Google to creat a substantive tool like they should be able to do. It simply uses your location, shows you the listings around you and provides the usual data you see on Zillow. Mine does the same thing except it doesn't have all of the inaccurate information found on Zillow. I suppose the difference is that Google is allowing Zillow to usurp it's own...
Posted by Ryan Ward on Wednesday, March 14, 2012 at 10:05:19 PMBy Ryan Ward / March 14, 2012Comment
Last October, I wrote that land values were on the rise in North Metro Atlanta and recent activity reinforces that article with more certainty. This is great news for all of us, but especially homeowners who had seen land values drop by about 40% from the highs of the market in 2007. This upward trend was inevitable, but it's been my experience recently with several other pieces of land available that many buyers are still quite reluctant to accept this upward trend as reality. I think there are a number of reasons for the uptick in values. What this means is that if you want to buy land, yesterday was better than today and tomorrow it will cost you more. This is irrefutable at this point and barring another major downturn (very unlikely), will in all likelihood continue. It does not mean however that your home is worth more - just the dirt underneath it. There are other factors in play affecting the values of the existing retail inventory of homes not the least of which is new construction.
Examples and Statistics
Earlier today, we closed on this 2.5 acre property with a small brick ranch that will be torn down on Hopewell just north of Redd for $140,000. That's a sale at 56K an acre for a property with frontage on a fairly busy road with a bit of road noise to boot. Couple that with the fact that a portion of the property was in a flood plain and it would be easy to make the case that an ideal setting would easily fetch over $70,000/acre in today's market. If that's not enough, there was another recent sale on Mid Broadwell that is even more exciting.
At a time when cutting back has become the norm, it’s no surprise that many in the process of buying a new home might be asking themselves, “Why do I need a realtor?” This seems a natural question for those interested in buying a new home, while wanting to save all they can. After all, you can talk with the home builder or his agent and quickly be the owner of a brand new home- and you can do it all without ever having to sit down with those money-grubbing realtors. But what you may not realize is that the money you are saving by skipping out on the realtor isn’t really being saved at all. In fact, those who don’t use a realtor are costing themselves more in the long-run. Come again?
That’s right. Whenever you try to save yourself that 3% commission rate, you aren’t cutting the cost of your home at all, because the realtor’s sales commission is taken from the builder’s profit. Furthermore, the seller’s agent has no interest in helping the buyer. His job is to get the best possible deal for the builder, so don’t be fooled by their friendliness, whether well-intentioned or not. The seller will not give you a discount because you aren’t represented by an agent. By going into the transaction unrepresented, the builder is free to either pocket his savings or pay a higher commission to their sales representative.
Now that we’ve debunked the myth that you’ll be coming out ahead by skipping an agent, we’d like to point out all of the benefits that come with being represented in your transaction.
For starters, your agent is a licensed professional, meaning he or she has a wealth of knowledge and resources unavailable to the average home buyer. By hiring a realtor, you also save yourself the time...
Posted by Ryan Ward on Wednesday, January 11, 2012 at 12:16:19 PMBy Ryan Ward / January 11, 2012Comment
We are excited to bring Providence back on the market after a break for the holidays! As you can see from the pictures below, there is nothing quite like this anywhere in North Fulton, or really, anywhere in Metro Atlanta quite like this.
Providence is a very sophisticated, classic American home custom designed by Stephen Fuller. The setting - your choice of either 30 or 60 acres (both with lake frontage), is private and peaceful and the home itself is a magnificent achievement of understated elegance and symmetry inspired by Thomas Jefferson's Monticello and George Washington's Mount Vernon estates.
If you are interested in viewing this home, please contact me directly and I will arrange a private showing. You can find more photos and a video at Providence's dedicated website, www.estatesinmilton.com. Call me directly at 404.630.3187. Enjoy the photos!
Posted by Ryan Ward on Tuesday, November 29, 2011 at 10:04:03 AMBy Ryan Ward / November 29, 20113 Comments
Luxury homes in Atlanta are available in all of the most sought after areas, but the highest concentration of luxury homes (homes for sale over $1,000,000) are found in Buckhead, Sandy Springs and the areas north of the Chattahoochee River on the east or west side of GA 400. It stands to reason that the closer you get to the city, the higher the concentration of luxury homes will be, but Buckhead and other intown areas do not hold exclusive rights to all of the finest homes available and there are many reasons you might want to look to Sandy Springs, Alpharetta or MIlton (to name a few) if you are in the market for a luxury home. Other areas of note might be Sugarloaf in Gwinnett or Virginia Highland, Ansley Park and Decatur, but those areas are small and therefore not part of this market update.
Buckhead the Bright Spot in the Down Market
Sales and availability of luxury homes in Buckhead have rebounded faster than other areas of the market. Here are the numbers for the numbers through November:
228 active listings
27 under contract
10.5% of listings are under contract
20 sales over $3,000,000
That's pretty good for what is supposed to be a soft market especially when compared to the other areas.
Sandy Springs begins where Buckhead ends on the north side of Chastain Park and runs outside of the perimeter essentially to the river, but the highest concentration of high end homes are inside of the perimeter. Here are the numbers:
80 active listings
10 under contract
12.% under contract
No sales over $3,000,000
Here we see that the percentage of listings under contract is higher than anywhere else including Buckhead, but there are no sales of homes above...
Posted by Ryan Ward on Thursday, October 13, 2011 at 1:41:12 PMBy Ryan Ward / October 13, 20113 Comments
Last Tuesday the bar was raised on the north side of town for land values with a sale that took place on Clarity Rd just across the border from Milton in Cherokee County. The $2,600,000 sale was a nice home, but it was the amount of land that sold with the home is what gets me excited. I've been in the home - I showed it to a buyer and the home with it's 33 acres represents the best sale this year to set a new floor for pricing in this market. based on the the size and quality of the home, the land would have had to be valued at or above $50,000/acre. Given its location in Cherokee County, this should set the prices higher for North Fulton for hopeful sellers.
6,100+ square feet according to the tax records
Numerous acres in the food plain
33 +/- acres
List price - $2,900,000
Sales price - $2,600,000
On the market at that price for less than 30 days before going under contract
It goes to show that once you get the price right, the market will always respond (provided there are people buying at that price point - and there are).
This is great news for many of us in the industry including myself as we have been looking for stabilization for some time. I think intuitevely many of us felt like this is where the market should be. Now we have the proof.
If your out there and have been hesitant to make a move it is certainly understandable. There are many other great properties to consider like mine at 1865 Bethany Way that is being offered with either 30 or 60 acres.
Now can be the right time to buy. A few more sales like this and prices may move from stabiliing to up. There isn't a...
Posted by Ryan Ward on Wednesday, September 21, 2011 at 11:23:05 AMBy Ryan Ward / September 21, 201114 Comments
This is something that we (and I think many other agents) struggle with in the market today. We meet with a client and go over what we believe should be the list price of a home and it's seldom a pleasant conversation. Typically, sellers know it's worth less than it was a few years ago, but getting the price right today really is more important than it used to be.
A home gets it's most activity from potential buyers in the early part of a listing period - the first 2 weeks. If it isn't priced for the market, it won't get an offer. Still, seller's feel they need to leave room to negotiate because they feel they need to squeeze every penny they can out of their sale. It's a fair enough idea, but it isn't grounded in what the data says they should do.
First, I'd like to discuss an important concept that regularly gets overlooked by both seller's and agents: It's impossible to underprice a home. Let me reiterate - you can't underprice your home. In a free market, it doesn't matter if you underprice by $1,000 or $50,000. It will sell for as much as the market will pay. Not more, not less.
So let's try to do a better job of recognizing the understandable objection about pricing and do a better job of explaining how the market works. If you list your home for the correct price, it will sell and it will happen fast regardless of your price point. It's not like homes aren't selling (see chart).
As you can see from this chart which shows home sales during this declined market, home sales are actually quite consistent. It's just that only the ones that represent exceptional value sell. If you price it at the right number, it's impossible for it not to sell. So the obvious question is that if you list it low and it sells...
Posted by Ryan Ward on Tuesday, March 15, 2011 at 10:23:18 PMBy Ryan Ward / March 15, 201126 Comments
This is for anyone looking to run a website with Flash on your iPad...
Update: Just get the web browser called Puffin. Works great and doesn't have a fee like iSwifter
As a real estate agent, the world is my office (yes, I have a brick and mortar office as well, but money is not made inside a real estate office). The basic premise of the mobile office has been upset by the development of a new version of our local MLS system which has elected to use a Flash based solution not compatible with our mobile world. To be polite, I will say it is less than ideal and I feel they should have been more forward thinking in looking out for a growing user base of agents going mobile, but what is done is done and I'd rather focus on solutions than complain. I don't have that kind of time...
I suppose you could try your luck with the Motorola Xoom which purports to have the ability to run Flash, but it just doesn't currently have the App support found at Apple and the iPad 2 has specs that are on par with the Xoom. In my inbox today was an Apple feed linking to this article about the iPad 2 and as I read through it, there was a link on the 3rd page of the article to another article here about an app called iSWiFTER which runs flash.
Feel free to read the articles if you like, but if you wan to run Flash - I mean real flash, not just flash videos, get the iSwifter app and pay the...
Posted by Ryan Ward on Tuesday, March 08, 2011 at 9:41:32 AMBy Ryan Ward / March 8, 20114 Comments
January is the worst month for home prices in Atlanta and 2011 is no different - although not as bad as I thought. We now have all of the January data compiled and we do have a new bottom for home values in Metro Atlanta that takes us back to levels not seen since 1998.
Closed sales were up and pending sales are up compared with 2010...
...and it's not as bad as it could be - or could have been for that matter especially with the weather we had early on in the month. Single family home (detached) prices are down 3.1% from 2010, but not lower than they were in January of 2009 and attached homes were down 18.4% from 2010. So I think it is more accurate to say that we have a mixed bottom. Technically, the new bottom of the market is January 2011, but I think that labeling the market as the worst it has been is only important for the doomsayers. Since the condo market is dragging us deeper in this hole while single family remains basically flat for 2 straight years (and now beginning a third year), I think it's important to make the distinction. The majority of sales (over 80%) are single family and that bottom was January of 2009. What we have is a technical new bottom and a bifurcation of the market trends as it relates to single family homes vs. condos.
The Hurdle is Financing (and therefore demand) and Foreclosures for Condos
Foreclosures played a large role in the decline in condo values as the median foreclosure price was $85,000. Until we shake out the remaining foreclosure numbers, we are going to have more trouble.
Financing for condos also complicate the problem. If you want to buy single family home it's not really a problem. 3.5% down and you are basically in. That's not the case with Condos where many buildings are not FHA approved making lending guidelines a bit more difficult. Where there is easier money, there are more sales. Since more sales by definition means higher demand, we see a relatively stable single family market...
Posted by Ryan Ward on Wednesday, February 09, 2011 at 2:05:18 PMBy Ryan Ward / February 9, 20111 Comment
If you know me, you know I have been saying this was coming for some time. According to the test scores published in the Atlanta Business Chronicle School Guide, Walton High School is no longer the highest testing high school in Metro Atlanta. The new testing champion is Northview High School (tied with Walton last year) serving parts of Johns Creek and Duluth and the new number 2 is Alpharetta High, which, basically serves zip code 30005. That drops the vaunted East Cobb school from first to third in test scores in one year!
***Disclaimer: Test scores do not inherently make a school "better" and you need to look at much more than the test scores from schools to determine if you want to live within a certain school district. If that's all you are considering as your parameters, you need to do more research. Go to the schools, talk to the principal, take a tour, etc...
Disclaimer aside, as a real estate professional I realize that schools drive buying decisions for many people relocating and one of the first questions asked of me or search parameters given to me is based around finding a home with "good schools." While I can not (and absolutely will not) tell anyone what is a "good" school, test scores are public information. Important public information. There is FAR more to consider including what schools feed into other schools, is the housing stock in my price point in a school district something that I would like to buy, where you work, how long is the commute, what are property taxes, etc, etc..so to only look at test scores is too narrow of a focus to stand on its own merit as a single parameter for selecting a new home.
In any event, I just picked up a large stack of school guides to include in our relocation packages and I always sift through them to see how my school district stacks up. I thought this was newsworthy as Walton has been king for so long. I'll post the 5 highest scoring elementary, middle and high schools when...
Posted by Ryan Ward on Thursday, December 30, 2010 at 5:25:24 PMBy Ryan Ward / December 30, 20102 Comments
We should have had this up before Christmas, but our schedules just couldn't make it work. Providence is an exceptional home by any standards, but the warmth you feel during the Christmas Season is something that photographs can just begin to help you explore. Nevertheless I gave it an effort yesterday. I only had about an hour and a half for the everything and the home is large requiring multiple lights set up to fill the rooms. This is realy only a glimpse, but worth a quick look.
My plan was to take the exterior shots at dusk and use them as the intro photos here, but for various reasons we couldn't get those shots. I think the ones I was able take will help give you an idea of what it's like to host parties and have family over for the holidays. I know this home is for only a few, but if you are someone who appreciates the finest craftsmanship and quality, you need to come visit. It is truly a masterpiece. You can see the full virtual tour here.
Dinner is Served
Make sure you bring lots of friends and family...
Gather in the Formal Living Room
Listen to the piano, watch the fire and think of how you can theme this room for Christmas!
Posted by Ryan Ward on Friday, October 29, 2010 at 10:48:49 AMBy Ryan Ward / October 29, 201013 Comments
The 3rd quarter is over and it was not great - but not really worse than most analysts expected. During the second quarter (and before the statistics were complete), many of us thought that we would see year over year increases in sales volume, but those numbers were more heavily influenced by the tax credit than was factored in to many of the early interpretations. It now looks like we will end up a couple percent down in sales volume and 5-6% down in sales price. ANother significant statistics for real estate here localy is that for the first time, RE/MAX is no longer the number one real estate company in Atlanta. Keller Williams surpassed RE/MAX in the number of closed sides of real estate transactions. Congrats to all of us at KW in Metro Atlanta!
While the numbers look down, the truth is that it is marginal- more sideways really - and not as bad as the bottom (January 2009). There is a chance still that we may set a new bottom in January or February of 2011, but in the bigger picture it will be more accurate to say that we are really just continuing to drag along the bottom. The actuaries can come back later and pinpoint the exact moment of the day, week, month and year of the bottom because if that is what you are looking for before you buy a house then you have miscalculated how to avoid risk in the real estate market. I'm not saying go blindly into your next purchase - only that we are at the bottom and it's not possible to judge the exact moment although it is probably a safe assumption that if you buy right now you aren't likely to see significant equity increases based upon appreciation in the next 2-3 years. On the other hand you aren't too likely to lose money if you work with a competent professional to help navigate the minefield that is the current market with lots of great opportunities and lots of really bad ones! Sorry for the digression....below is the video (I'm still working on some technical qualities, but this is pretty decent). It's about 10 minutes long...
Posted by Ryan Ward on Monday, June 14, 2010 at 10:04:18 PMBy Ryan Ward / June 14, 201055 Comments
*Update - I have updated this post as it remains extremely useful to many people and as the app store has developed, I've changed apps. Currently, the best app for this that I have found is PDF Expert and I have adjusted that further down the page. If you know of something that works better, please post a reply in the comments.
Previous Best App:
Previously, the best app for this that I have found is TakeNotes and I have adjusted that further down the page and left the basic 'how to' if you want to use it. It still works very well, but does not fill in form fields the way PDF Expert does although it has a better user interface to create text box to add text.
**If you aren't interested in an iPad or you don't need to manipulate PDFs and/or sign them, you can probably skip this post. On the other hand, if you are a real estate agent or any other person who may want to get an iPad, but thinks that it is only a toy because all you can do is read the web (without flash ((which turns out to be less of a deal than I thought)), you may find this post interesting.
I was a doubter. I thought that it was really just a toy, but I really wanted an iPad anyway. Besides, I have a weakness for new electronic toys and I like technology and I like being an early adopter so I really wasn't able to NOT get one.
Now that I have one, I need it to make it work for business - and it does. I can search the GAMLS via http://www.georgiamlspro.com/ (a well designed version of the GAMLS which many Atlanta estate agents dread using), I can read Word and Excel documents and I can write documents on Pages and export as Pages, Word or PDF. I can even create a flyer better than most flyers...
Posted by Ryan Ward on Tuesday, April 13, 2010 at 1:44:35 PMBy Ryan Ward / April 13, 201014 Comments
This is my first attempt at a video and after coming back from REtechSouth, it became clear that I needed to make an effort to move into video. Although I am constantly reminded that video killed the radio star and might kill me too, I nonetheless have decided to slap my face up on the screen. I'm sure I will get over the stage fright soon :)
This one definitely isn't perfect, but I'll improve. I think it's an important topic and hopefully it will help convince you of why you need a survey.
The Importance of a Survey
More Survey Information
I'll write a follow up post with more information on why you need a survey this evening.
"The Georgia Senate Thursday unanimously passed legislation aimed at overhauling a property assessment system thrown into disarray by huge market-driven fluctuations in property values. The bill, which now goes to the House, would restore Georgia homeowners’ loss of confidence in the fairness of the property tax bills they receive from local governments each year, said Senate Majority Leader Chip Rogers, the measure’s chief sponsor. Homeowners across the state are complaining that they’re being taxed based on assessments that no longer accurately reflect the declining value of their properties, said Rogers, R-Woodstock. “The assessments are not keeping pace with fair market value,” he said. “Property owners are paying (taxes) on value they don’t own.” In an effort to ensure greater accuracy, the bill would require local governments to send out assessment notices to property owners annually. Owners who disagree with their assessments would be given 45 days to appeal, up from the current 30 days. In setting property values, assessors would have to take into account the effects of foreclosures in the neighborhood."
I find this to be great news for homeowners across the state. I get emails from homeowners who find me online, past clients and friends asking how to go about the process of appealing their tax assessments. With the market in flux the way it is, we need a more responsive government.
This might be worth contacting your state representative...
"The Peach State had 11,274 foreclosure filings -- default notices, scheduled foreclosure auctions and bank repossessions -- last month. This was down 13.1 percent from December 2009, but was 13.8 percent higher than January 2009. The state ranked 10th for foreclosures".
The report also says that 1 out of every 357 houses in Georgia got a foreclosure notice in January. This is in line with national numbers that have a decrease from December, but a year over year increase. Nationally, 1 in 409 homes received a foreclosure notice so we are performing worse than the total market. More from ABC:
“January foreclosure numbers are exhibiting a pattern very similar to a year ago -- a double-digit percentage jump in December foreclosure activity followed by a 10 percent drop in January,” said James J. Saccacio, CEO of RealtyTrac “If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works.”
I am still of the belief that banks will moderate the number of foreclosure homes entering the market. Every home they add to supply lowers the value of their REO assets so I believe that they will continue to manage the flow of listings to protect the values. It's in their best interest and it is in our best interest.
Posted by Ryan Ward on Monday, February 08, 2010 at 6:53:51 AMBy Ryan Ward / February 8, 20101 Comment
Bank of America has filed suit against MGIC, one of the nations largest mortgage insurance companies. MGIC has rescinded many of its obligations to pay saying that they aren't contractually obligated to pay for loans that weren't properly underwritten. According to a Bizjournal story, MGIC cut 1.2 billion dollars in payments and Bank of America has filed a lawsuit as well as discontinued using MGIC for its mortgage insurance. Bank of America has also discontinued using MGIC to insure loans.
If you have a loan with less than 20% down, you or your lender has paid for mortgage insurance on your loan. If the loan goes bad, the mortgage insurance company is supposed to pay up. However, with so many bad loans, mortgage insurers are pointing the finger back at the bank in many cases saying that the loans were not underwritten properly. In these cases, the insurance companies won't pay out and in my opinion, shouldn't.
What was missing during the housing boom was accountability. I don't see a problem making sure that the right entity pays for loans going bad unless its another taxpayer bailout.