by Calculated Risk on 10/17/2007 10:21:00 AM

Quote of the day from MGIC Investment Chief Executive Curt Culver during the conference call:

"The books of business written in 2005, 2006 and most of 2007 will be difficult books financially. These books feature weaker underwriting, and will play out in an environment of deteriorating real estate values. In fact, we modeled an approximate 10% nationwide decline impacting these books. The declines are even more extreme in various MSAs. Frankly, the loss side has hit us much harder and more quickly than we could have ever anticipated. From the loss guidance estimates, we have seen revised from our industry, as well as a number of mortgage originators who are no longer in business, it was not anticipated by many. The ramp-up of loss performance relative to delinquencies, the severity and the cure rate deterioration in California and Florida has been at speeds not seen in previous books of business.” emphasis added

From MarketWatch: MGIC posts loss on C-Bass investment

MGIC Investment Corp. Wednesday reported a third-quarter net loss of $372.5 million, or $4.60 a share, compared with net income of $130 million, or $1.55 a share the previous year. The company said its quarterly results included a $303 million write-down related to the impairment of its investment in Credit Based Asset Servicing and Securitization LLC, known as C-Bass, a joint venture owned by MGIC and Radian Group Inc. ... MGIC said "unless the cure rate and loss severity improves, the company does not foresee net income for the fourth quarter of 2007 and the full year 2008."