Standard & Poor's Ratings Services said it has lowered its counterparty credit and financial strength ratings on five U.S. mortgage insurance groups and their core and dependent foreign subsidiaries.
The rating actions were taken against:
o Republic Mortgage Insurance Co. ratings were lowered to "triple-B-minus" from "single-A-negative."
o PMI Mortgage Insurance Co. and Radian Mortgage Insurance Inc. were lowered to "single-B-plus" from "double-B-minus."
o The ratings on Genworth Mortgage Insurance Corp. were lowered to "triple-B-minus" from "triple-B-plus."
o The ratings on United Guaranty Mortgage Indemnity Co. were lowered to "triple-B" from "triple-B-plus."
The outlook on all of these companies is negative.
Ron Joas, Standard & Poor's credit analyst said in a statement that the downgrades reflected the rating agency's view that macroeconomic conditions had a significantly more "adverse impact on mortgage insurers that we had expected in April."
Losses are expected to be reported next year and possibly into 2011, but there may be some improvement for some that began in the second half of this year and could continue into next," he said.
A backlog in foreclosures due to high unemployment and the economic crisis has slowed claims payments, but extended loses over a longer period than initially expected.
S&P said it is continuing its reviews of CMG Mortgage Insurance Co. and California Housing Loan Insurance Fund, and it expects to resolve the Credit Watch status of the ratings on those companies soon.
