MILWAUKEE, Aug. 3 /PRNewswire-FirstCall/ -- Mortgage Guaranty Insurance Corporation ("MGIC") today announced that, in connection with discussions to have its wholly owned subsidiary MGIC Indemnity Corporation ("MIC") approved as an eligible mortgage insurer by Fannie Mae and Freddie Mac, MGIC has delayed the date on which it plans to make its first contribution of capital to MIC to a date to be determined by MGIC and acceptable to the Office of the Commissioner of Insurance of Wisconsin ("OCI"). The OCI has approved this delay at MGIC's request. In addition, as discussed below, MGIC expects the amount of capital to be contributed to MIC by MGIC will be reduced. As previously announced, in connection with a plan for MIC to begin writing new mortgage insurance business as of January 1, 2010, the OCI allowed MGIC to contribute up to $1 billion to MIC. MGIC's contribution was to be made in two $500 million installments, the first of which was to be made not later than July 31, 2009. The second contribution was to be made within five business days after January 1, 2011 if MIC was then writing new business and the contribution was not disallowed by the OCI. MIC's writing new business is subject to the specific authorization of the OCI. The plan to use MIC to write new business was driven by MGIC's concern that in the future MGIC might not meet regulatory capital requirements to continue to write new business. These requirements are present in certain states while other jurisdictions do not have specific capital requirements. It is possible that as part of obtaining GSE approval of MIC as an eligible mortgage insurer, MIC would write new business in certain states and MGIC would continue to write new business in the remaining jurisdictions. If this structure were implemented, the amount of capital needed by MIC to write new business would be less than what it would need if it wrote business in all jurisdictions. As a result, MGIC would reduce its contribution of capital to MIC. The amount of capital that MGIC would contribute to MIC will be determined as part of the discussions with GSEs on their approving MIC as an eligible mortgage insurer. These discussions are ongoing and include alternatives other than MIC writing new business in certain states and MGIC continuing to write new business in the remaining jurisdictions. In addition, TARP or other governmental funding could be alternatives to MIC. About MGIC MGIC (http://www.mgic.com/), the principal subsidiary of MGIC Investment Corporation, is the nation's leading provider of private mortgage insurance coverage with $220.1 billion primary insurance in force covering 1.4 million mortgages as of June 30, 2009. MGIC serves over 3,300 lenders with locations across the country, Puerto Rico, and other locations helping families achieve homeownership sooner by making affordable low-down-payment mortgages a reality. Safe Harbor Statement Forward Looking Statements and Risk Factors: Our plans to write business in MIC could be affected by the risk factors below and the other risk factors filed with our periodic reports to the Securities and Exchange Commission. These risk factors should be reviewed in connection with this press release and our periodic reports to the Securities and Exchange Commission. These risk factors may also cause future events to differ materially from the forward looking statements that we may make. Forward looking statements consist of statements which relate to matters other than historical fact, including matters that inherently refer to future events. Among others, statements that include words such as we "believe", "anticipate" or "expect", words such as we or another party "will" or words of similar import, 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. We may not be able to execute our plan to write business in an MGIC subsidiary. We cannot predict whether we will be successful in obtaining approval from the GSEs for MIC or for MGIC to implement any alternative structure that would enable MGIC to continue to write new mortgage insurance if in the future MGIC did not meet regulatory capital requirements to continue to write new business. Even if such approvals are obtained, we cannot predict the conditions on which they may be given. In addition, the authorization of the OCI will be needed for any changes regarding MIC. Any capital relief that could be made available through TARP or other external sources could dilute substantially the interest of existing shareholders and could also have additional costs. We cannot predict whether any source of external capital will be available to us. MGIC may not continue to meet the GSEs' mortgage insurer eligibility requirements. The majority of our insurance written is for loans sold to Fannie Mae and Freddie Mac, each of which has mortgage insurer eligibility requirements. As result of MGIC's financial strength rating being below Aa3/AA, it is operating with each GSE as an eligible insurer under a remediation plan. We believe that the GSEs view remediation plans as a continuing process of interaction between a mortgage insurer and the GSE that continues until the mortgage insurer under the remediation plan once again has a rating of at least Aa3/AA. There can be no assurance that MGIC will be able to continue to operate as an eligible mortgage insurer under a remediation plan. If MGIC ceases being eligible to insure loans purchased by one or both of the GSEs, it would significantly reduce the volume of our new business writings. DATASOURCE: MGIC Investment Corporation CONTACT: Investors, Michael J. Zimmerman, +1-414-347-6596, , or Media, Katie Monfre, +1-414-347-2650, , both of MGIC Investment Corporation Web Site: http://www.mgic.com/

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