Analysts at Fitch Ratings warned today of possible downgrades to the ratings of private mortgage insurers MGIC Investment Corp., PMI Group Inc. and Radian Group Inc., saying the companies may not return to profitability until 2010 and will have to raise additional capital to counter rising losses. Fitch analysts cited a sharp increase in delinquencies among subprime and reduced-documentation alt-A loans made from 2005 through 2007, saying those loans are more likely to end up in foreclosure than in the past because of reduced options to refinance. Poor underwriting practices by lenders combined with "continued and accelerating national home-price declines" has made it impossible for many borrowers to sell or refinance a home to avoid foreclosure, analysts said. The phenomenon has ...
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