MGIC Investment Corp., the largest U.S. mortgage insurer, may inject less capital than previously planned into an inactive subsidiary after determining it may be able to keep selling coverage through the traditional channel.

MGIC may only need to activate the subsidiary in states where regulators demand higher capital standards, the Milwaukee company said Monday.

The insurer said last month it will inject as much as $1 billion into the inactive subsidiary, and the firm planned to make the first contribution, for $500 million, by July 31.

That payment was delayed, MGIC said Monday, as the insurer discusses plans for the subsidiary with government-run mortgage financing firms Freddie Mac and Fannie Mae and its regulator in Wisconsin.

MGIC's capital was pressured after eight straight unprofitable periods as a record number of U.S. homeowners failed to keep up with payments.

MGIC may have other alternatives, including government funding, the company said.

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