MGIC Investment Corp. (MTG): Can It Be Boosted By Housing’s Strength?

The real issue for MGIC going forward is whether it will still be allowed to write new insurance. Fannie Mae and Freddie Mac have given MGIC waivers when its risk-to-capital ratios were above 25, and may have to keep doing so. The point of raising capital was to get back toward compliance, so it’ll be interesting to see what impact MGIC’s offerings have on its ratios going forward.

In MGIC’s report, watch for signs of how activity in mortgage refinancing is proceeding. With some banks reporting troubling trends in mortgage activity, MGIC Investment Corp. (NYSE:MTG) could face a problem if interest rates throw a wrench into the good times for the housing market lately.

The article Can Housing’s Strength Boost MGIC’s Earnings? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger owns warrants on AIG. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends AIG. The Motley Fool owns shares of and call options on AIG.

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