MGIC Investment Corp.—the nation’s largest mortgage insurer in terms of policies-in-force—lost $274 million in the second quarter, almost double the amount of red ink it suffered in the same period a year ago.
At deadline, its share price had plunged to $1.08, down 56% on the day. It was the firm’s eighth straight quarterly loss.
Since the housing bust of 2008, three MI firms have stopped writing policies and entered run-off mode: PMI, Triad and RMIC.
There are just five MIs open and operating today.
MGIC’s huge loss was not surprising. In the second quarter it incurred a $551 million charge because of what it calls “late stage delinquencies.”
But there was some good news in the earnings report: the company wrote $5.9 billion of new policies compared to $3.1 billion in the same period a year ago. Home Affordable Refinance Program loans added another $2.7 billion. (MGIC, like other private mortgage insurers, considers these policies to be modifications of coverage, not NIW.)
Also, the percentage of delinquent loans in its book of business fell to 12.51% compared to 13.4% at June 30, 2011.
The firm’s risk-to-capital ratio at its primary underwriting unit Mortgage Guaranty Insurance Corp. is now at 27.8-to-1, and its minimum policyholder position is $211 million less than what its primary regulator in Wisconsin wants: $1.3 billion.
In its footnotes, MGIC said it believes it has enough capital on hand to meet its claims payment obligations.
Starting in the third quarter, the company will use MGIC Indemnity Corp. to write new policies in California, Florida, New Jersey, North Carolina, Ohio, Oregon and Texas in addition to New York, Idaho and Puerto Rico.
