Industry News

MGIC posts $372 million Q3 loss

Mortgage insurer expects to stay in the red in 2008

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Mortgage insurer MGIC Investment Corp. today reported a $372.5 million third-quarter loss, and said it does not expect to make a profit next year as it pays out up to $1.5 billion in claims. MGIC said losses for the quarter were driven in part by one-time charges, including a $303 million after-tax write-down of the value of the company's investment in a subsidiary, C-BASS, that invested in subprime mortgages. But the company also saw paid losses on the loans it insures climb to $602 million, compared with $165 million in the same quarter a year ago, as the number and size of delinquent loans grew. MGIC said fourth-quarter paid losses are expected to total $270 million to $290 million, and that paid losses will total $1.2 billion to $1.5 billion next year. The company said the rising popularity of mortgage insurance and improved credit standards should benefit in the long run, and that the company is "well positioned" from a capital perspective. MGIC has been writing mo...