Industry News

MGIC tightening underwriting standards in 30 markets

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Thousands of borrowers in 22 states will no longer be able to obtain private mortgage insurance from MGIC Investment Corp. after March 3, when the company raises its minimum standards in 30 restricted markets. The latest changes to MGIC's underwriting standards follow warnings from company executives that they expect a $1.3 billion fourth-quarter loss on Feb. 13, and that MGIC will stay in the red in 2008 as it pays out up to $2 billion in claims (see Inman News story). MGIC's new list of restricted markets includes four entire states -- California, Florida, Arizona and Nevada -- and 26 markets in 18 other states where home prices are falling. The restricted markets include Denver; Washington, D.C.; Atlanta; Honolulu; Chicago; Baltimore; Boston; Detroit; Minneapolis; Newark, N.J.; New York City; Portland, Ore.; and Vancouver, Wash. In a regulatory filing, MGIC said the new underwriting standards will affect borrowers who have multiple risk factors such as a high loan-t...