MILWAUKEE, Sept. 27, 2018 /PRNewswire/ -- Today the
Federal Housing Finance Agency (FHFA) released revised private
mortgage insurer eligibility requirements (PMIERs 2.0) that private
mortgage insurers must meet to be eligible to provide mortgage
insurance on loans delivered to or purchased by Fannie Mae and
Freddie Mac (GSEs). The effective date of PMIERs 2.0 is
March 31, 2019.
The financial requirements of PMIERs 2.0 require a mortgage
insurer's "Available Assets" (generally only the most liquid assets
of an insurer) to equal or exceed its "Minimum Required Assets"
(which are based on an insurer's book of insurance in force,
calculated from tables of factors with several risk dimensions and
subject to a floor amount).
If PMIERs 2.0 had been effective as of June 30, 2018, MGIC estimates that its pro forma
excess of Available Assets over Minimum Required Assets would have
been approximately $600 million,
compared to its reported excess of approximately $1.0 billion as of June 30, 2018. The difference is primarily due to
the elimination of any credit for future premiums that had
previously been allowed for certain insurance policies.
Although MGIC's excess Minimum Required Assets will decrease when
PMIERs 2.0 becomes effective, MGIC does not expect PMIERs 2.0 to
impact its current plans to pay quarterly dividends to its holding
company, subject to any necessary approvals by its Board of
Directors and the Wisconsin Office of the Commissioner of
Insurance.
Patrick Sinks, CEO of MGIC and
MTG, said, "I am pleased that the revised eligibility requirements
have been finalized so we can now turn our full attention to
providing increased access to credit for consumers and reducing GSE
credit risk while generating good returns for shareholders."
The foregoing description of the PMIERs 2.0 is only a summary
and is subject to and qualified by the text of the actual
requirements, which are available on the FHFA's website
(www.fhfa.gov).
About MGIC
MGIC (www.mgic.com), the principal subsidiary of MGIC Investment
Corporation (NYSE:MTG), serves lenders throughout the United States, Puerto Rico, and other locations helping
families achieve homeownership sooner by making affordable
low-down-payment mortgages a reality. At August 31, 2018, MGIC had $204.5 billion of primary insurance in force
covering approximately one million mortgages.
From time to time MGIC Investment Corporation releases important
information via postings on its corporate website, and via postings
on MGIC's website for information related to underwriting and
pricing, and intends to continue to do so in the future. Such
postings include corrections of previous disclosures, and may be
made without any other disclosure. Investors and other interested
parties are encouraged to enroll to receive automatic email alerts
and Really Simple Syndication (RSS) feeds regarding new postings.
Enrollment information for MGIC Investment Corporation alerts can
be found at
https://mtg.mgic.com/shareholder-services/email-alerts. Enrollment
information for MGIC alerts can be found
https://www.mgic.com/ClearRates/index.html.
Safe Harbor Statement
Forward Looking Statements and Risk Factors:
Statements regarding the potential impact of PMIERs 2.0 and
MGIC's continued ability to pay dividends to its holding company
are forward looking statements. We are not undertaking any
obligation to update any forward looking statements or other
statements we may make even though these statements may be affected
by events or circumstances occurring after the forward looking
statements or other statements were made. No investor should rely
on the fact that such statements are current at any time other than
the time at which this press release was issued. Below is a brief
summary of some of the risk factors that could cause our results to
differ materially from those expressed in, or implied by, the
forward looking statements included in this press release.
Before investing in the issuer's securities, investors should read
and carefully consider the risks described in Exhibit 99 to its
Quarterly Report on Form 10-Q filed on August 3, 2018.
- Competition or changes in our relationships with our
customers could reduce our revenues, reduce our premium yields and
/ or increase our losses.
- The amount of insurance we write could be adversely affected
if lenders and investors select alternatives to private mortgage
insurance.
- Changes in the business practices of the GSEs, federal
legislation that changes their charters or a restructuring of the
GSEs could reduce our revenues or increase our losses.
- We may not continue to meet the GSEs' private mortgage
insurer eligibility requirements and our returns may decrease as we
are required to maintain more capital in order to maintain our
eligibility.
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SOURCE MGIC Investment Corporation