Industry News

MGIC says it will survive, but won’t profit in 2008

Future claims on loans sold to investors drive $1.47 billion loss

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Private mortgage insurer MGIC Investment Corp. said fourth-quarter losses totaled $1.47 billion, as the company paid out more claims on bad loans and boosted projections of future claims on loans that were bundled up as collateral for securities sold to Wall Street investors. Although MGIC executives expect the company to remain in the red in 2008, they say it will remain adequately capitalized to pay claims. "Despite this difficult operating environment, the company has adequate capital to meet its claim obligations and … there have been significant improvements to the company's business fundamentals, including higher persistency, increased use of mortgage insurance, higher premiums for certain segments of business and improved credit standards, which should benefit the company financially over the long term," the company said in a regulatory filing. New insurance written in the fourth quarter totaled $24 billion, compared with $15.5 billion a year ago, and total...