876437--3/2/2009--MGIC_INVESTMENT

related topics

{loss, insurance, financial}

{capital, credit, financial}

{stock, price, share}

{tax, income, asset}

{financial, litigation, operation}

{loan, real, estate}

{investment, property, distribution}

{debt, indebtedness, cash}

{system, service, information}

{product, market, service}

{regulation, government, change}

Changes in the business practices of Fannie Mae and Freddie Mac could reduce our revenues or increase our losses. A downturn in the domestic economy or a decline in the value of borrowers homes from their value at the time their loans closed may result in more homeowners defaulting and our losses increasing. The mix of business we write also affects the likelihood of losses occurring. Because we establish loss reserves only upon a loan default rather than based on estimates of our ultimate losses, our earnings may be adversely affected by losses disproportionately in certain periods. Because loss reserve estimates are subject to uncertainties and are based on assumptions that are currently very volatile, paid claims may be substantially different than our loss reserves. The premiums we charge may not be adequate to compensate us for our liabilities for losses and as a result any inadequacy could materially affect our financial condition and results of operations. The amounts that we owe under our revolving credit facility and Senior Notes could be accelerated. Our financial strength rating has been downgraded below Aa3/AA-, which could reduce the volume of our new business writings. Loan modification and other similar programs may not provide material benefits to us. If interest rates decline, house prices appreciate or mortgage insurance cancellation requirements change, the length of time that our policies remain in force could decline and result in declines in our revenue. The amount of insurance we write could be adversely affected if lenders and investors select alternatives to private mortgage insurance. Competition or changes in our relationships with our customers could reduce our revenues or increase our losses. Our common stock could be delisted from the NYSE. If the volume of low down payment home mortgage originations declines, the amount of insurance that we write could decline, which would reduce our revenues. We are subject to the risk of private litigation and regulatory proceedings. The Internal Revenue Service has proposed significant adjustments to our taxable income for 2000 through 2004. We could be adversely affected if personal information on consumers that we maintain is improperly disclosed. The implementation of the Basel II capital accord may discourage the use of mortgage insurance. We may not be able to recover the capital we invested in our Australian operations for many years and may not recover all of such capital.

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876437--3/2/2009--MGIC_INVESTMENT_CORP