Higher claim rate pushes MGIC to a $247 million loss
Claims for insurance coverage on defaulted mortgages pushed MGIC Investment Corp. (MTG) to a deeper third-quarter loss, according to the company's latest earnings report.
The mortgage insurer finished the period with a $246.9 million, or $1.22 a share, net loss, which is far deeper than the $164.2 million loss recorded a year earlier.
Despite the company reaching a major resolution with Freddie Mac on insurance issues, most of the losses for the period – which tallied $490.1 million – are not associated with the negotiations. Instead, they are related to an increase in the company's claim rate. MGIC began the period with 148,885 delinquent loans. The period brought 10,937 new notices, as well as 9,401 cures. Meanwhile, the company paid out on 3,780 claims and recorded 359 denials, ending the month with 146,282 delinquent mortgages.
Underwriting and other expenses reached $50.7 million, which is down by approximately $2 million from last year. Revenue for the period also fell to $306.2 million, compared to $337.2 million a year earlier.
Despite steep losses, the company wrote $7 billion in new insurance, up from $3.9 billion in the third-quarter of last year. Insurance written through the government's Home Affordable Refinance Program represented $3.7 billion of all new insurance during the period.