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Friday, February 29, 2008

MBIA Writing `Very Little' New Business

by Calculated Risk on 2/29/2008 10:51:00 AM

From Bloomberg: MBIA Writing `Very Little' New Business Amid Scrutiny

MBIA Inc. is writing ``very little'' new bond insurance business as borrowers balk at buying a guarantee from a money-losing company without stable AAA credit ratings.

MBIA, whose AAA ratings were under scrutiny by Moody's Investors Service and Standard & Poor's until this week, said losses on mortgage-backed securities will probably increase this year and expand beyond subprime mortgages.
From the MBIA SEC from 10-K.
In the fourth quarter of 2007, the Company observed deterioration in the performance of several of its prime and near prime home equity transactions and established $614 million of case basis reserves for future payments. During the fourth quarter of 2007, the Company paid $44 million in claims, net of reinsurance, on seven credits in this sector. Additionally, in the fourth quarter of 2007, the Company established $200 million of non-specific unallocated loss reserves to reflect MBIA’s estimate of probable losses as a result of the adverse developments in the residential mortgage market related to prime, second-lien mortgage exposure, but which have not yet been specifically identified to individual policies. The Company expects that loss payments on its prime, second-lien mortgage exposure during 2008 will amount to a significant portion of its current reserves for such exposure.