MGIC Announces Reduced Borrower-Paid Premium Rates

MILWAUKEE, April 9, 2018 /PRNewswire/ -- MGIC Investment Corporation's (NYSE: MTG) principal subsidiary, Mortgage Guaranty Insurance Corporation (MGIC), the nation's first private mortgage insurance company, announced reduced borrower-paid premium rates that reflect the lower corporate tax rate signed into law in 2017. By incorporating the tax benefit and allowing all lenders access to these reduced premium rates, MGIC believes that borrowers and lenders will be better served in their quest for affordable and sustainable low-down-payment lending solutions.

Borrower-paid mortgage insurance premium rates on the most popular premium plans have been reduced by an average of approximately 11%.

Patrick Sinks, CEO of MTG and MGIC said, "Over the last few months we've seen our competitors offer reduced borrower-paid premium rates to many, but not all, customers. Our decision to incorporate the new tax rate into our borrower-paid premiums allows all lenders and their borrowers to benefit from lower premiums." 

Down payment remains the number one obstacle to homeownership and borrower-paid monthly premiums, because they are cancelable, are one of the most popular and affordable ways to overcome this obstacle.

Sinks added, "While we are lowering premium rates, MGIC will continue to have a strong capital position that protects policyholders while achieving returns for shareholders that are commensurate with the risk associated with low-down payment lending."

The new rates are effective June 4, 2018. A presentation with illustrative examples of the price changes can be found at https://mtg.mgic.com/events-and-presentations. Full details of the announcement and new premium rates will be posted by 6 p.m. ET today at https://www.mgic.com/rates.

About MGIC

MGIC (www.mgic.com), the principal subsidiary of MGIC Investment Corporation, 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 February 28, 2018, MGIC had $196.5 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, including corrections of previous disclosures, without making any other disclosure and intends to continue to do so in the future. 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 can be found at http://mtg.mgic.com under Investor Information.

Safe Harbor Statement

Forward Looking Statements and Risk Factors

Our actual results could be affected by the risk factors below. These risk factors may also cause actual results to differ materially from the results contemplated by forward looking statements regarding our capital position and returns or other statements that may be forward looking statements in the foregoing press release. More detail about these risks may be found in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2017.

• Competition or changes in our relationships with our customers could reduce our revenues 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.
• We are involved in legal proceedings and are subject to the risk of additional legal proceedings in the future.
• Resolution of our dispute with the Internal Revenue Service could adversely affect us.
• If our risk management programs are not effective in identifying, or adequate in controlling or mitigating, the risks we face, or if the models used in our businesses are inaccurate, it could have a material adverse impact on our business, results of operations and financial condition.
• Downturns in the domestic economy or declines in the value of borrowers' homes from their value at the time their loans closed may result in more homeowners defaulting and our losses increasing, with a corresponding decrease in our returns.
• The mix of business we write affects our Minimum Required Assets under the PMIERs, our premium yields and the likelihood of losses occurring.
• The premiums we charge may not be adequate to compensate us for our liabilities for losses and as a result any inadequacy could materially affect our capital and returns.

SOURCE MGIC Investment Corporation

Related Links

http://www.mgic.com