MGIC Investment Corp., Milwaukee, lost $152 million in the second quarter, as new default notices outpaced cures, but it sees future opportunity to regain market share.
For the second quarter last year, MGIC had a net profit of $25 million.
Investors did not look favorably on the whole segment in morning trading. On a day when the Dow was down because of global debt fears, as of 11 am, MGIC was down over 18% on the day; Radian off nearly 12%; PMI over 9%; Genworth under 7%; and Old Republic down 3%.
Losses incurred were $460 million, up from $320 million one year ago.
In a conference call, MGIC chairman and chief executive Curt Culver said there was an increase in paid pool insurance claims of $98 million between the first and second quarters, to $167 million.
He expects the elevated pace in pool paid claims will continue for the third quarter before trending downward.
During the call, Culver also said investors should buy MGIC because the opportunity to regain market share from the Federal Housing Administration is tremendous, the mortgage industry has returned to old underwriting standards and there is an opportunity for MGIC to consolidate in its own industry.
During the quarter, MGIC had $3.1 billion of new insurance written, up from $2.7 billion one year prior. The second quarter number does not include $583 million of insurance relating to Home Affordable Refinance Program modifications, which MGIC treats as a modification of coverage in force.
