MGIC Loses $185 Million, Talks Options
Continued mortgage delinquencies drove the $184.6m quarterly net loss -- $1.49 per share -- at MGIC Investment (MTG), according to its earnings statement. First-quarter losses of $757.9m erased the $435.2m in total revenue at the company. Mortgage Guaranty Insurance, MGIC's principal subsidiary and a substantial private mortgage insurance provider, wrote $6.4bn in new insurance in the quarter, down almost 67% from the $19.1bn written in the year-ago period. As of quarter-end, delinquent loans -- excluding bulk loans -- made up 10.6% of MGIC's insured portfolio, compared with 9.5% at year-end 2008. A weak economy, rising unemployment levels and lower home prices contributed to the volume of delinquencies this quarter and, as a result, the volume of claims filed by the lenders whose mortgages are insured by MGIC. Chairman Curt Culver said the company holds more-than-adequate resources to pay insured claim obligations, but has discussed 'capital options' with the US Treasury Department. Write to Diana Golobay at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.