The Motley Fool Previous Page

MGIC's Woes Multiply on Rising Mortgage Losses

Shubh Datta
August 25, 2011

The United States' biggest mortgage insurer, MGIC Investment (NYSE: MTG  ) , reported a second-quarter loss recently as loan defaults jumped. The Milwaukee-based company has now reported losses for four straight quarters.

The housing slump, frustratingly high unemployment, and a shaky economic recovery have all played their part in adding to the mortgage insurer's woes. MGIC has not seen yearly profits since 2006 due to the foreclosure crisis.

The housing slump
MGIC saw losses as Americans struggled to pay off their mortgage requirements, reflecting the broader weakness prevalent in the economy. Rising foreclosures have posed a serious threat to these mortgage insurers.

Radian Group (NYSE: