DOW JONES NEWSWIRES 
 

MGIC Investment Corp.'s (MTG) mortgage-insurance unit delayed its first payment to the MGIC division which will write new business and expects the planned $1 billion in capital to be reduced as it seeks to have the unit approved as an eligible mortgage insurer by Fannie Mae (FNM) and Freddie Mac (FRE).

Mortgage Guaranty Insurance Corp. said Wisconsin's insurance regulator has approved the delay. A new date on when the payment could occur wasn't given, but did note the amount will be determined in its discussions with Fannie and Freddie.

MGIC last month got approval from the state to contribute up to $1 billion to MGIC Indemnity Corp., which will take over writing new business. The effort stemmed from MGIC fearing it won't meet regulatory capital requirements to write new business - the company said in April it expected losses through the rest of the year and a further decline in net worth. It then weighed options to obtain capital to continue writing new business.

The first installment of $500 million was planned by the end of July and the second was set for early 2011, assuming that MGIC Indemnity was writing new policies at that time.

Shares closed at $6.60 on Friday and were inactive premarket. The stock is up 90% this year.

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; tess.stynes@dowjones.com