Fitch: MI Financial Strength Ratings at Risk

A number of major players in the mortgage insurance industry, especially the stand-alone companies, need to raise substantial amounts of capital or risk downgrades of their insurer financial strength ratings, according to Fitch Ratings. Only two mortgage insurers, Genworth Mortgage Insurance Co. and United Guaranty Residential Insurance Co. (part of American International Group), had their IFS ratings affirmed (at AA and AA-plus, respectively) and their rating outlook held at stable. Fitch placed the IFS and long-term issuer ratings of MGIC Investment Corp., the PMI Group, and Radian Group Inc. on Rating Watch Negative. Unless they raise capital, MGIC and Radian could have their IFS ratings cut by one notch and PMI by two notches, the rating agency said. The fourth stand-alone MI, Triad Guaranty Insurance Co., is already on Rating Watch Negative. Triad has an IFS rating of AA-minus, and Fitch said it believes the company's capital is well below the level needed to maintain it. Unless more capital is raised, Fitch may lower Triad's ratings below the A level, the rating agency said. Fitch took no action on Republic Mortgage Insurance Corp.'s AA IFS rating and negative rating outlook. RMIC benefits from being a subsidiary of Old Republic International Corp., Fitch said.