Credit woes could increase Fla. mortgage defaults

TALLAHASSEE, Fla. (AP) - Florida's insurance commissioner says
the national credit crunch could lead to more home foreclosures.

That's because the Florida Hurricane Catastrophe Fund, which provides backup coverage for insurance companies, is having a hard time lining up financing, Commissioner Kevin McCarty told the Senate Ways & Means Committee on Thursday.

If the fund runs out of money, it sells bonds to cover remaining claims.

It's unlikely the fund could sell enough bonds if a major hurricane should strike because the bond market is so tight, McCarty said.

The state is exploring other options including a line of credit from the federal government.

Committee Chairman JD Alexander, R-Lake Wales, said one alternative is to raise premiums.

(Copyright 2009 by The Associated Press. All Rights Reserved.)

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