MGIC Investment Corp. said the Wisconsin insurance regulator waived minimum capital requirements for two years, permitting the firm, the largest U.S. mortgage insurer, to continue selling coverage.
The waiver replaces a portion of an earlier plan to inject capital into an inactive subsidiary, the Milwaukee company said Thursday.
Mortgage insurers have reported mounting losses over the past two years as a record number of U.S. homeowners failed to keep up with payments.
MGIC's chief executive officer, Curt Culver, had earlier announced the activation of the subsidiary as a way to continue selling coverage even as claims costs on existing policies rose.
Mortgage insurers pay lenders when homeowners default and foreclosures fail to cover costs.
The record number of U.S. foreclosures has caused more than $3.3 billion in net losses at MGIC since the third quarter of 2007. The latest quarterly loss, $517.8 million, widened from $115.4 million in last year's third quarter.
