Milwaukee-based Mortgage Guaranty Insurance Corp. (MGIC), which was devastated by the housing market collapse and hasn’t posted an annual profit since 2006, could be headed for a comeback, a report says.
Last week, a Bloomberg article featured a new report from S&P analyst Ron Joas, which said, “Mortgage insurers seem poised to return to profitability in 2014.”
The article also notes that the U.S. Treasury Department said in a report that mortgage insurers are beginning to see a turnaround.
“There are signs of increased capacity,” Treasury’s Federal Insurance Office said. “The industry has attracted new capital since 2010.”
In March, Standard & Poors had upgraded MGIC’s rating from CCC+ to B- after the company offered 125 million shares of common equity at $5.15 each and jointly $450 million in senior convertible notes. Proceeds were expected to be more than $1.2 billion.
MGIC posted a first quarter net loss of $72.9 million, or 31 cents per share, up significantly from a net loss of $19.56 million, or 10 cents per share, in the first quarter of 2012. However, new insurance written in the first quarter was $6.5 billion, up 55 percent compared to $4.2 billion in the first quarter of 2012.
