Mortgage Daily Logo
mortgage news from industry experts

MGIC Plan Approved

MGIC Plan ApprovedWisconsin regulator approves reactivation of MGIC Indemnity Corp.

July 16, 2009

By staff

Mortgage Guaranty Insurance Corp. has obtained approval to reactivate a dormant subsidiary so that it can keep writing new business.

The Office of the Commissioner of Insurance for the State of Wisconsin approved a reactivation plan for MGIC Indemnity Corp., a statement today said.

The subsidiary must still obtain an authorization from Wisconsin and licenses in other states. It also needs approval from Fannie Mae and Freddie Mac. In some states, business will be run through another wholly owned subsidiary that will be capitalized with around $8 million.

Under the plan, MGIC Guaranty will contribute up to $1 billion to MGIC Indemnity. The first investment of $500 million will occur by July 31, while the second $500 million installment will need to be made within five business days after January 1, 2011.

The move will allow the Milwaukee-based firm to continue writing new business in its current markets. If all goes well, MGIC Indemnity hopes to begin writing new mortgage insurance business on Jan. 1, 2010.

Human resources as well as risk management, information systems and other business infrastructure will be provided by MGIC Guaranty.

MGIC is maneuvering to avoid a potential rift with policyholders who might fear the re-activated operations could siphon capital that might otherwise be used to pay their claims.

“Since MGIC Indemnity Corp. is a wholly owned subsidiary of MGIC Guaranty Insurance Corp., MGIC will benefit from the mortgage insurance business conducted by MGIC Indemnity Corp.,” the statement said. “MGIC’s policyholders should also take comfort from the fact that the allowance of the reactivation plan by the Office of the Commissioner of Insurance follows months of discussion and third party analysis of MGIC’s claims paying resources remaining after the capitalization of MGIC Indemnity Corp.”

next story

back to current headlines

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...


Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts