Industry News

MGIC expects $1.3 billion Q4 loss

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Mortgage insurer MGIC Investment Corp. expects fourth-quarter losses to hit $1.3 billion and that the company will stay in the red this year as it pays out up to $2 billion in claims, up from a previous estimate of up to $1.5 billion. MGIC said its year-end inventory of delinquent loans rose by nearly 18 percent from the end of the third quarter, to 107,120 loans. Although that's a small fraction of the 1.3 million loans insured as of the end of September by MGIC's main subsidiary, Mortgage Guarantee Insurance Corp., deteriorating "cure" rates mean more of those delinquent loans are expected to become claims, MGIC officials said of their increased paid-loss forecast for 2008. MGIC is also in the process of analyzing the implications of its decision to stop insuring large packages of loans that are bundled up as collateral for securities sold to Wall Street investors. MGIC has said that nearly three quarters of its primary risk in force written through the so-called "bu...