(Bloomberg) — MGIC Investment Corp., the No. 3 U.S. mortgage guarantor, declined in New York trading after posting profit that missed some analysts' estimates as sales of home-loan guarantees slowed.
Net income was $45.5 million, or 12 cents a share, trailing by 2 cents the average estimate of analysts surveyed by Bloomberg. Policy sales fell 9.8% to $213.4 million, Milwaukee-based MGIC said today in a statement, MGIC fell 5.9% to $7.86 at 9:46 a.m. in New York.
MGIC, which had benefited as rising home prices reduced losses tied to policies issued before the real estate crisis, is vulnerable to slowing property sales. The shares have fallen since federal regulators proposed tighter liquidity standards last week for mortgage insurers that do business with Fannie Mae and Freddie Mac.
"If we increase the amount of capital we hold with respect to insured loans, our returns may decrease unless we increase premiums," MGIC said in today's statement. "An increase in premium rates may not be feasible."
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