MGIC Cuts Capital Contribution in Half

MGIC Investment Corp., the U.S. mortgage insurer that breached regulators’ capital limits, said it cut in half to $100 million the amount it must put into an underwriting subsidiary to continue writing policies nationwide.

The deadline for the capital contribution, originally set for the end of this month, was extended to Dec. 1, Milwaukee-based MGIC said today in a statement distributed by PR Newswire.

MGIC’s eight straight losses on costs tied to soured home loans pushed the firm’s ratio of risk relative to capital above limits set by some state regulators. Falling capital levels could impair the firm’s ability to sell new policies that protect lenders when mortgage borrowers default and foreclosures fail to recoup costs.

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