MGIC Loses $971m on Increasing Delinquencies

MGIC Investment Corp. (MTG) posted a $517.8m net loss in Q309, compared to losses of $115.4m in Q308 and $184.6m in Q209. The net loss for the first nine months of 2009 was more than $1bn, compared to a net loss of $250m during the same period of 2008. The firm reported total losses of $971m in Q309, up from $788.3m during Q308, “primarily due to an increase in delinquencies,” the firm said. New insurance written in Q309 was $4.6bn, compared to $9.7bn in Q308, but that does not include $450m in insurance written for loans refinanced in the Making Home Affordable Refinance Program (HARP), due to these transactions being treated as a modification of the coverage on existing insurance in force, MGIC said. The company continues to face challenges as it attempts to work out a deal to begin writing new insurance through its MGIC Indemnity Corp. (MIC) subsidiary. The Milwaukee-based company must meet regulatory capital requirements of the Wisconsin Office of the Commissioner of Insurance. The company said this week Fannie Mae (FNM) approved MIC as an approved mortgage insurer in some jurisdictions and anticipates reaching a deal with Freddie Mac (FRE) in the near future. Once the Freddie Mac deal is reached, MGIC believes the Wisconsin Commissioner of Insurance will issue a decision on the reactivation of MIC. Mortgage Guaranty Insurance Corp., MGIC Investment’s primary subsidiary, writes private mortgage insurance for more tan 3,300 lenders and currently covers 1.4m mortgages. Write to Austin Kilgore.

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