The largest U.S. mortgage insurer MGIC Investment ( MTG) is not accepting any new business after a huge loss in the second quarter.

MGIC said it will stop writing new business and instead will provide up to $1 billion to subsidiary Mortgage Indemnity Corp. (MIC) to write new mortgage guaranty insurance beginning next year.

The news sent shares down 8% to $3.62 in pre-market trading. "When MIC is fully operational, MGIC will stop writing new business," the company said in a statement.

During the quarter, the company recorded a loss of $339.8, or $2.74 a share, compared with a loss of $99.9 million, or 81 cents a share, a year earlier. Analysts expected a loss of 93 cents.

Revenue actually grew 7% to $454.5 million from $424.5 million last year.

MGIC wrote $5.9 billion of new insurance in the quarter, compared with $14 billion a year ago, as consumers shun the company due to record defaults that have threatened its stability.
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

If you liked this article you might like

Bullish and Bearish Reversals for This Week

Bullish and Bearish Reversals for This Week

Allergan, Apple, Facebook: Doug Kass' Views

Allergan, Apple, Facebook: Doug Kass' Views

MGIC Investment (MTG) Stock Climbing on Q3 Results

MGIC Investment (MTG) Stock Climbing on Q3 Results

Mortgage Insurers Catch the Eye of EJF Capital

Mortgage Insurers Catch the Eye of EJF Capital

Bullish and Bearish Reversals for the Week

Bullish and Bearish Reversals for the Week