Alyssa Lane
The Mortgage Guaranty Insurance Corporation (MGIC) is an insurance company that provides mortgage insurance services. It is the primary subsidiary of the publicly traded MGIC Investment Corporation, which is headquartered in Milwaukee, Wisconsin. MGIC offers private mortgage insurance, helping people buy homes with as little as a 3% down payment. This insurance protects lenders and investors against losses from mortgage loan defaults. The company has been in operation since 1957 and has faced challenges such as the subprime mortgage crisis, but it has reemerged profitable, with a 2015 income of $1.2 billion.
| Characteristics | Values |
|---|---|
| Type of Company | Insurance Company |
| Services | Mortgage Insurance Services |
| Type of Insurance | Private Mortgage Insurance |
| Parent Company | MGIC Investment Corporation |
| Founder | Max H. Karl |
| Year Founded | 1957 |
| Headquarters | Milwaukee, Wisconsin |
| Area Served | United States, Puerto Rico, and other locations |
| Number of Employees | 550 (in Milwaukee) |
| Income (2015) | $1.2 billion |
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What You'll Learn
History of Mortgage Guaranty Insurance Corporation
The Mortgage Guaranty Insurance Corporation (MGIC) is a subsidiary of the publicly traded MGIC Investment Corporation. It was founded in 1957 by real estate attorney Max H. Karl in Milwaukee, Wisconsin.
Karl founded the company after noticing that his clients were struggling to pay for their new homes. He believed that federal mortgage guarantees were too difficult to obtain, so he created the first private mortgage insurance company. MGIC allowed loan originators to offer loans to borrowers who were unable to make a full 20% down payment. This helped to make homeownership more affordable for many people. By 1967, MGIC controlled around 70% of the American private mortgage insurance market.
In 1982, Karl sold the company to Baldwin United for $1.2 billion. Unfortunately, in 1983, Baldwin United filed for Chapter 11 bankruptcy protection. As a result, in 1985, MGIC was liquidated, and its assets were sold to Northwestern Mutual for $775 million. Despite this setback, MGIC has since recovered and continues to be one of the nation's largest private mortgage insurers.
In addition to mortgage insurance, MGIC also provides lenders with various underwriting and other services and products related to home mortgage lending. They offer borrower-paid and lender-paid mortgage insurance, as well as innovative services, training, and resources for their lender partners. MGIC serves lenders in the United States, Puerto Rico, and Guam.
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Services offered by MGIC
The Mortgage Guaranty Insurance Corporation (MGIC) is an insurance company that provides mortgage insurance services. Founded in 1957 by real estate attorney Max H. Karl, it is the first and one of the largest private mortgage insurers in the nation.
MGIC offers private mortgage insurance (PMI), enabling borrowers to purchase homes with as little as a 3% down payment. This product protects loan originators and reduces the risk for lenders by insuring a portion of the mortgage loan in the event of default.
MGIC provides services to both borrowers and lenders. For borrowers, MGIC's PMI makes homeownership more accessible and affordable. It allows individuals who may not have a full 20% down payment to achieve their dream of owning a home sooner.
For lenders, MGIC offers a range of innovative services, training, and resources in addition to its mortgage insurance solutions. These services include webinars, workshops, and the Mortgage Connects knowledge hub, which provides valuable content such as infographics, blog posts, podcast episodes, videos, and online resources.
The company also offers tools such as an all-in-one self-employed income calculator with worksheets to analyze borrowers' incomes and help lenders strategize and succeed in the market. MGIC's local account managers, underwriting service centres, servicing relationship managers, and customer service representatives are available to provide support and answer any questions.
MGIC is committed to creating value for its stakeholders, including co-workers, customers, investors, and communities. The company provides easy access to news, updates, announcements, operating statistics, and quarterly results through its website.
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MGIC's role in affordable homeownership
The Mortgage Guaranty Insurance Corporation (MGIC) is an insurance company that provides mortgage insurance services. It is a publicly traded company and the parent organisation of the Mortgage Guaranty Insurance Corporation. MGIC is one of the largest private mortgage insurers in the US.
MGIC offers private mortgage insurance (PMI) to help borrowers with low down payments become homeowners sooner. This insurance helps loan originators and allows them to offer loans to borrowers who may not be able to make a full twenty percent down payment. By purchasing this insurance, borrowers can buy a home with as little as a 3% down payment.
MGIC also offers an affordable lending program that provides flexibility to facilitate community financing needs for portfolio lenders. They work with lenders and partners to connect them with community investment solutions to boost their equitable homeownership efforts.
In addition, MGIC collaborates with other organisations and trade groups that share their focus on expanding sustainable homeownership opportunities and closing homeownership gaps. These include the MBA, NAHREP, NAREB, NCSHA, NALHFA, HPC, NHC, NCRC, and AEI. By partnering with these organisations, MGIC aims to develop innovative solutions, advocate for policy changes, and increase access to affordable housing.
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MGIC's parent company, MGIC Investment Corporation
MGIC Investment Corporation is the publicly traded parent company of the Mortgage Guaranty Insurance Corporation (MGIC). With roughly 550 Milwaukee-based employees and offices across the United States, MGIC is one of the country's largest private mortgage insurers.
MGIC was founded in 1957 by Milwaukee real estate attorney Max H. Karl, who believed that federal mortgage guarantees were too burdensome to attain. Karl's idea was to have a private company insure only the top portion of a mortgage. He took this idea to a group of investors, along with his family and friends, who contributed $250,000 in capital. By 1967, MGIC controlled around 70% of the American private mortgage insurance market.
Despite losses due to the subprime mortgage crisis of the early 21st century, MGIC has reemerged profitable. The corporation’s 2015 income totaled $1.2 billion. In 1982, MGIC merged with Baldwin-United Corporation, although this merger was short-lived as Baldwin-United filed for Chapter 11 bankruptcy in 1983. However, MGIC remained in compliance with all insurance capital requirements, and in 1985, the Northwestern Mutual Life Insurance Company made a $250 million investment, along with existing MGIC management, and founded the "new" MGIC.
MGIC provides a critical component of the country's residential mortgage finance system by protecting mortgage investors from credit losses. The company offers private mortgage insurance solutions and a variety of innovative services, training, and resources to its lender partners. MGIC makes lending safer for its customers, which include banks, mortgage bankers, mortgage brokers, credit unions, mortgage loan servicers, and mortgage investors.
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MGIC's webinars and workshops
MGIC, or the Mortgage Guaranty Insurance Corporation, is an insurance company that provides mortgage insurance services. It is a publicly traded company and the parent organisation of the Mortgage Guaranty Insurance Corporation.
MGIC offers a range of webinars and workshops for lending professionals. These are designed to help loan officers and lenders build their businesses and better serve their customers. The webinars cover a range of topics, including:
- Fraud protection: helping lenders and loan officers protect themselves, their companies, and their borrowers from fraud.
- Sales strategies: covering communication and execution skills to help earn customer loyalty.
- Housing market outlook: sharing insights from experts such as Dr. Lawrence Yun to help loan officers prepare for the future.
- Income analysis: teaching participants how to document, calculate, and analyse various income types, including self-employed income.
- Loan types and programs: covering the mortgage cycle, key players, regulatory compliance, and loan application processes.
- Referral relationships: offering tips to build and nurture relationships with real estate agents and other referral partners.
- Marketing and referrals: sharing insights from the Loan Originators Survey to help with marketing, referrals, and productivity.
- Hispanic market insights: providing cultural understanding to better serve Hispanic borrowers and build trust.
In addition to these webinars, MGIC also offers ready-made workshops and online resources through its Mortgage Connects knowledge hub. The hub includes infographics, blog posts, podcast episodes, videos, and other resources to help lending professionals stay informed and successful in the dynamic mortgage industry.
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Frequently asked questions
The Mortgage Guaranty Insurance Corporation (MGIC) is an insurance company that provides mortgage insurance services. It is the primary subsidiary of the publicly traded MGIC Investment Corporation.
Mortgage insurance, also known as mortgage guarantee and home-loan insurance, is an insurance policy that compensates lenders or investors in mortgage-backed securities in the event of a borrower defaulting on their mortgage loan.
MGIC is a private mortgage insurance provider, helping lenders and their communities by making homeownership more affordable. It allows borrowers to obtain a mortgage with a low down payment, as little as 3%.
MGIC was founded in 1957 by real estate attorney Max H. Karl, who believed federal mortgage guarantees were too difficult to obtain. It was the first private mortgage insurer, and by 1967 it controlled around 70% of the American private mortgage insurance market.
