Moody's Reviewing Mortgage Insurers
|February 1, 2008|
NEW YORK (AP) -- Credit rating agency Moody's Investors Service said Thursday evening it is reviewing the ratings of multiple mortgage insurers and has placed negative outlooks on others.
Moody's placed the ratings of mortgage insurance subsidiaries of the PMI Group Inc. and Triad Guaranty Insurance Corp. on review for a possible downgrade.
The rating on both Genworth Financial Inc. and Republic Mortgage Insurance Co. were both affirmed, but their outlooks were changed to negative.
Insurance subsidiaries at MGIC Investment Corp. and Radian Group Inc. remain on review for a possible downgrade.
The rating of United Guaranty Corp., a subsidiary of American International Group Inc., was affirmed with a stable outlook.
All the ratings actions result from Moody's increased loss expectations in the U.S. mortgage market and the effect it would have on capital reserves for the insurers.
Mortgages, especially home equity products and subprime mortgage -- loans given to customers with poor credit history -- have increasingly defaulted in recent months. Those increased defaults mean rising claims that mortgage insurers will need to pay out.
Moody's expects losses on 2006 vintage mortgages to range between 14 percent and 18 percent and is currently updating loss expectations on other types of mortgages.
Shares of PMI Group rose 55 cents, or 5.8 percent, to $10.05 in premarket trading. Triad Guaranty shares rose 15 cents, or 2.2 percent, to $2.14. MGIC Investment shares rose 9 cents to $18.50.
Copyright AP 2008