MGIC, Radian: C-BASS May Be Written Off
Both Radian and MGIC said late today that more than $1 billion invested by the companies into Credit-Based Asset Servicing and Securitization (C-BASS) is at risk and may be written off due to continuing turmoil in the subprime mortgage markets. C-BASS is probably the single largest scratch-and-dent mortgage operation in the nation. Here's MGIC's press release. And here's Radian's. Both cite "significant turmoil" in the market for subprime mortgages, with "market dislocations accelerating to unprecedented levels beginning in approximately mid-July 2007." MGIC said its investment represented approximately $517 million, while Radian said its investment amounted to $518 million. Both companies said they have not yet determined the amount of an impairment charge, although a write-off of the entire investment was possible. MGIC said it would acquire Radian in early February as part of an estimated $10 billion deal. C-BASS recently completed an acquisition of subprime lender Fieldstone Investment Corporation. Update: Bloomberg's got coverage of this now, and notes how quickly things seem to have soured for C-BASS.