MGIC, PMI Surge After Old Republic Becomes Top Holder (Update3)

MGIC Investing Corp. and PMI Group
Inc., the two greatest U.S. mortgage insurers, rose in New York
trading after Old Democracy International Corp. disclosed it became
the biggest investor in each company.

Old Republic, the Chicago-based insurer, bought 15 percentage of
PMI's stock and 11 percentage of MGIC's, according to regulatory
filings today. PMI, based in Walnut Creek, California, rose the
most since the company went public in 1995, surging $3.77, or 34
percent, to $14.88.

Mortgage insurers, which protect loaners against homeowner
default, plunged as the worst lodging slack in 16 old age deepened in
the 3rd quarter, leading to enter foreclosures and losings for
MGIC and PMI. The industry should be profitable in 2010, said Al
Zucaro, the head executive director military officer of Old Republic, which have the
sixth-largest U.S. mortgage insurer.

''They certainly cognize the mortgage coverage concern because
of their Democracy Mortgage subsidiary,'' Toilet Gwynn, an analyst at
Morgan Keegan Inc. inch Memphis, Tennessee, said in an interview. ''Zucaro is one of the most well-thought-of coverage directors in the
country.'' Gywn rates Old Democracy stock ''market perform.''

Old Democracy rose the most in five years, gaining 90 cents or
6.4 percent, to $15.07 in New House Of York Stock Exchange composite
trading. Milwaukee-based MGIC, the biggest mortgage insurer,
climbed $2.94, or 16 percent, to $21.30.

''We believe we cognize a couple things about the mortgage guaranty
business,'' Zucaro said in an interview. ''The recent marketplace value
of these pillory is substantially below what we anticipate in a few
years.''

MGIC and PMI each lost more than than 65 percentage of their market
value this year.

Gross Gains

Mortgage insurance companies are selling more than insurance as loaners seek to
lower their hazard and do their loans more attractive to investors. Members of Washington-based trade grouping Mortgage Insurance
Companies of America, including PMI, MGIC and Republic, issued
policies to 151,355 householders in September, 59 percentage more than a
year earlier.

Still, the figure of insured borrowers in the U.S. falling
more than 60 years behind on their payments climbed 22 percentage to
54,699, according to the group.

PMI's third-quarter premium gross rose 20 percentage to $256.8
million as the figure and size of loans it insured increased. The
company had a nett loss of $86.8 million, its first ever as a
publicly traded company, as claims costs increased fivefold. MGIC's
loss was $372.5 million as costs to bail out loaners tripled and
the company said it didn't anticipate to be profitable in 2008. Premium
revenue rose 8.4 percentage to $321 million.

'Choppy Waters'

''We anticipate to be navigating some pretty choppy Waters over
the adjacent couple of years,'' said Zucaro, 68. ''You shouldn't be in
the coverage concern unless you have got a 5-to-10 twelvemonth horizon.''

Old Democracy got about 39 percentage of its pretax net income from
mortgage coverage and 13 percentage from statute title coverage over the
past five years, according to the company Web site.

Net income tumbled 75 percentage to $29.2 million in the third
quarter from a twelvemonth earlier, led by losings in the mortgage and
title guarantee businesses. Premium gross from mortgage insurance
rose 21 percentage to $133.9 million.

Old Democracy lost 35 percentage of its marketplace value this year.

The shares of MGIC and PMI were purchased ''strictly as
passive investments'' and not to act upon the companies or take
control of them, Old Democracy said in a filing. The retentions were
obtained in the unfastened marketplace over the past 11 weeks, the company
said.

MGIC spokeswoman Katie Monfre declined to comment. PMI
spokeswoman Beth Haiken didn't go back a phone call seeking comment.

To reach the newsman on this story:
Josh P. William Rowan Hamilton in New House Of York at .