National City Reports MI Dispute

In a regulatory filing with the Securities and Exchange Commission, Cleveland-based National City Corp. says one of the two mortgage insurance companies covering its home equity loan portfolio has refused to make claims payments.Published reports identified the MI firm as Radian Group. In the SEC filing, NCC said one of the two providers has been paying claims on the lender-paid MI policies promptly, while the other "has been rejecting a reasonable number of claims filed for reasons that National City believes are inappropriate under the insurance contract." National City said that depending upon how the dispute on the MI coverage for the $2.2 billion second-lien portfolio is resolved, it may have to increase loss reserves by an amount in the range of $50 million. In the same filing, National City said the hedging of its mortgage servicing portfolio resulted in a $45 million pretax loss during the first two months of this year.