The Alaska Housing Finance Corp. and the state recently agreed to a $58 million settlement from a group of private mortgage insurance companies in exchange for dropping charges that the insurers underpaid on certain claims.
The legal dispute related to the insurers' handling of thousands of mortgage insurance claims submitted by the housing finance agency during the late 1980s and early 1990.
Defaults by borrowers on residential mortgages financed by the housing agency triggered the claims.
Mortgage Guaranty Insurance Corp. of Milwaukee and a group of European reinsurers agreed to pay the housing agency $31 million immediately under terms of the settlement.
About $21 million already has been paid during the course of settlement discussions, and the $6 million balance will be paid as individual properties are sold.
The settlement also provides guidelines for Mortgage Guaranty's handling of the finance agency's future mortgage claims.
The insurers also agreed to honor several hundred mortgages on which insurance coverage had previously been challenged.