MGIC absorbs higher losses

Milwaukee-based MGIC Investment Corp., the nation’s largest private mortgage insurer, today reported a fourth quarter net loss of $386.7 million, compared with a net loss of $135.3 million in the fourth quarter for fiscal 2011.

The company said the quarterly loss included a one-time charge of $267.5 million for settlement of the Freddie Mac pool dispute. Also, loss reserve estimates for the quarter were increased by $100 million for probable settlements from rescission disputes with Countrywide and another lender, the company said.

Curt Culver, chief executive officer and chairman of the board of Mortgage Guaranty Insurance Corp. (“MGIC”) and MTG, said, “I am pleased that we have settled our Freddie Mac dispute and have made substantial progress towards resolving the Countrywide dispute.”

The net loss of all of fiscal 2012 was $927.1 million, up from a net loss of $485.9 million in fiscal 2011. Total revenues for the fourth quarter were $371.4 million, down from $447 million in the previous fourth quarter. For the full year revenues were $1.38 billion, down from $1.5 billion in fiscal 2011.

However, new insurance written by the company is up. The company reported new insurance written of $7 billion for the fourth quarter, up from $4.2 billion in the fourth quarter of 2011, and $24.1 billion for the full year, up from $14.2 billion in 2011.

“While the weak employment market continues to challenge the pace of recovery of the legacy books and our financial results, I am pleased to report that new insurance written volume is up 70 percent while delinquency notices are down 21 percent year-over-year, and new business written since the second half of 2008 accounts for 33 percent of our primary in force,” Culver said.

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