Zacks_Analysts' Blog : MGIC Slashes Jobs, Posts Aug Stats - Analyst Blog

Private mortgage insurer, MGIC Investment Corp. (MTG) recently announced 19 layoffs at its Milwaukee headquarters, including five positions associated with the company’s eMagic and Myers Internet units.

The job cuts at eMagic and Myers Internet units relate to the fact that MGIC is mulling over the sale of these two units. While eMagic is an online mortgage loan origination service for banks, credit unions, mortgage bankers and originators, Myers creates websites for mortgage and real estate professionals. The company currently employs 750 people at its Milwaukee headquarters.

Concurrent with the layoff announcement, MGIC also released its operating statistics for the month of August, which showed that the company’s mortgage unit – Mortgage Guaranty Insurance Corp. (MIC) – wrote more new insurance in August and the number of its bad loans fell sequentially to 183,338 mortgages as of August end from 185,093 as of July end. Also, the number of delinquent loan cures reported by the company rose to 11,719 during the reported month.

During the second quarter, MGIC reported a 15% increase in new insurance written, led by increasing mortgage insurance share compared with FHA and the company’s improving market share within the industry. Besides, the company’s delinquent inventory dropped 19% year over year and 6% sequentially.

MGIC, along with peers such as Radian Group Inc (RDN), PMI Group (PMI) and Genworth Financial (GNW), underwrote millions of mortgages during the housing boom, which later led to losses in billions when the loans started defaulting, forcing the companies to pay huge claims. However, with the dust settling, we believe MGIC’s existing policyholders should benefit from the profitability of new insurance written by the company.