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Old July 16th, 2009 #1
Joe_J.
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Join Date: Jul 2005
Location: Gone to work on the lemming sites against Big Jew.
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Default Mortgage insurance co. in trouble.

Quote:
NEW YORK, July 16 (Reuters) - MGIC Investment Corp (MTG.N) will invest up to $1 billion in a spin-off insurance unit that it hopes will help the mortgage finance company survive a deep housing downturn, sending its shares up 19 percent.
The largest U.S. mortgage insurer said it plans to wind down its existing operations and capitalize a subsidiary at the beginning of next year in a move that could let the company build fresh investments as the housing market stabilizes.
Friedman, Billings Ramsey analyst Steve Stelmach raised the stock to "outperform" from "market perform" and said with regulatory approval for a new operating subsidiary, the company has increased flexibility to generate future revenue to offset losses on the existing book.
MGIC on Thursday reported a wider quarterly loss on rising defaults in the battered housing sector.
MGIC aims to begin funding the new unit with $500 million by the end of July and intends to have the new business, Mortgage Indemnity Corp, eventually replace MGIC.
"When MIC is fully operational, MGIC will stop writing new business, i.e., it will go into run-off," the company said in a statement.
Analyst Mike Grondahl of Northland Securities said it was very positive that the company got regulatory approval for a new unit that will allow it to continue to write business.
The company's main regulator in Wisconsin approved the restructuring that will see MGIC trim its capital reserves to fund the realignment. Some analysts were concerned bond holders faced greater risk in a plan that depletes the company's cushion against policy claims.
The company has no plans to issue equity or debt in connection with the capitalization of MIC, it said.
Mortgage finance companies Fannie Mae (FNM.N), Freddie Mac (FRE.N) partner with insurers like MGIC to help shield them from losses.
A home buyer who cannot offer a 20 percent down payment, for instance, will often turn to mortgage insurers.
http://www.reuters.com/article/marke...0090716?rpc=44

This looks like a spinoff to get out of trouble if they can. A very jewy scenario itz.
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