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Terms and conditions of use of MGIC websites

Important Notice Regarding Use of this Site: This Website and all other MGIC Websites (collectively, the "Site") are provided for your use by Mortgage Guaranty Insurance Corporation, its affiliates and parent corporation ("MGIC") subject to the following terms and conditions ("Terms"). Your use of this Site constitutes your agreement to the Terms.

Any attempted unauthorized use of or access to this Site is strictly prohibited and may result in criminal and/or civil prosecution. MGIC reserves the right to monitor and record access to and use of this Site without notice or permission (see our Privacy Policy). Any information obtained through monitoring is subject to review by law enforcement organizations in connection with the investigation or prosecution of possible criminal activity on the Site.

Modifications

MGIC reserves the right to change these Terms at any time by posting the changes at the Site and your continued use of this Site will constitute your acceptance of the Terms, as modified. MGIC also reserves the right at any time and from time to time to modify or discontinue, temporarily or permanently, with or without notice, use of the Site and any function or page of the Site, including, without limitation, content, hours of availability, products and services offered, terms of use and access requirements. You agree that MGIC shall not be liable to you for the modification, suspension or discontinuance of any service or function of the Site.

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User Restrictions and Responsibilities

You ("User") agree not to do any of the following in connection with your use of the Site:

  • download or print any information from this Site for any purpose other than for your personal use or for conducting User's business with MGIC via the Site;
  • upload, post, e-mail, transmit or otherwise make available on or through the Site any content that is unlawful, harmful, threatening, abusive, harassing, tortious, defamatory, vulgar, obscene, libelous, invasive of another's privacy, hateful, or racially, ethnically or otherwise offensive;
  • upload, post, e-mail, transmit or otherwise make available on or through the Site any content that infringes any patent, trademark, trade secret, copyright or other property rights of any person or entity;
  • upload, post, e-mail, transmit or otherwise make available on or through the Site any material that contains any computer virus or other computer code, files or programs designed to interrupt, destroy, limit or interfere with the functionality of any computer software, hardware or telecommunications service or equipment, including any denial of service attack mechanisms;
  • remove, alter, obscure or destroy any copyright, patent or other property rights notice or marking placed upon or contained within any page of the Site;
  • reverse engineer, disassemble, decompile or otherwise attempt to discover the source code to any software, systems, designs, processes or proprietary information of MGIC;
  • copy (other than in the ordinary course of business use of the Site) any Site screen displays, video, audio, animation, graphics, photographs or text, or remarket, resell, or redistribute the Site, in whole or part, or include any portion of the Site by the practice commonly known as "framing" in any other Internet or World Wide Web site, without in each case obtaining the prior written consent of MGIC.

You agree to indemnify and hold MGIC and its affiliates harmless from any claim or demand, including reasonable attorneys' fees and costs associated therewith, made by any third party due to or arising out of any content you submit, post, transmit or make available through the Site, your use of the Site, your violation of any of these Terms or your violation of the rights of a third party.

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Trademarks and Copyrights

The Site includes service marks and trademarks of Mortgage Guaranty Insurance Corporation and its affiliates, including "MGIC." The Site may also contain trademarks and service marks of third parties used by MGIC with permission. No right or license to use any patent, copyright, trademark, service mark, trade secret or other intellectual property contained in this Site, or in any software, systems, designs or processes related to this Site, is granted to or otherwise conferred upon you pursuant to these Terms, and all such rights are reserved to and shall remain the exclusive property of MGIC.

Links

The Site contains links to other Internet sites and resources. Please be aware that MGIC has no control over such sites or resources and is not responsible for the availability of such third-party sites or for any content, products or services obtained from such third-party sites. For information about any linked site, you should read the terms of use posted at that site.

Jurisdiction and Restriction on Foreign Use

The Site is administered by MGIC from its offices in Milwaukee, Wisconsin, USA. MGIC makes no representation that content or services of the Site are appropriate or available for use outside of the United States or Puerto Rico, and access to the Site from outside the United States or Puerto Rico is prohibited. You may not use or export the materials at the Site in violation of applicable laws and regulations, including, without limitation, United States export laws and regulations. If you choose to access the Site from outside the United States, you are responsible for compliance with local law. These Terms will be governed by and construed in accordance with the laws of the State of Wisconsin, without reference to such State's conflicts of law principles.

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Limitations of Liability and Damages

THIS SITE AND THE INFORMATION PRESENTED AT THE SITE MAY CONTAIN INACCURACIES AND TYPOGRAPHICAL ERRORS. THIS SITE AND THE INFORMATION DISPLAYED AT AND OBTAINED THROUGH USE OF THE SITE ARE PROVIDED "AS IS," WITHOUT ANY WARRANTIES OF ANY KIND. MGIC HEREBY DISCLAIMS ANY AND ALL EXPRESS AND IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO (i) ANY WARRANTIES AS TO THE AVAILABILITY, CONTENT, ACCURACY, QUALITY, RELIABILITY OR COMPLETENESS OF THE SITE, ANY DATA, INFORMATION, SERVICE OR PRODUCT PROVIDED, OBTAINED OR GENERATED BY OR THROUGH THE SITE, AND (ii) ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MGIC DOES NOT WARRANT OR REPRESENT THAT THE SITE WILL PERFORM WITHOUT INTERRUPTION OR ERROR, OR THAT ALL IRREGULARITIES, ERRORS, PROBLEMS OR DEFECTS WILL BE DETECTED OR CORRECTED, OR THAT THE SITE WILL MEET YOUR REQUIREMENTS.

UNDER NO CIRCUMSTANCES AND UNDER NO LEGAL THEORY, WHETHER TORT, CONTRACT, STRICT LIABILITY, WARRANTY OR OTHERWISE, WILL MGIC BE LIABLE TO YOU OR OTHERS FOR ANY DIRECT, INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, OR ANY LOSS OF REVENUE OR PROFITS, LOSS OF GOODWILL, LOSS OF SAVINGS, LOSS OF USE, INTERRUPTIONS OF BUSINESS OR CLAIMS OF OTHERS ALLEGED AS A RESULT OF YOUR USE OF, OR INABILITY TO USE, THIS SITE, EVEN IF MGIC OR ITS REPRESENTATIVES HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. MGIC SHALL NOT BE LIABLE FOR DAMAGES CAUSED OR ALLEGEDLY CAUSED BY ANY FAILURE OF PERFORMANCE, SECURITY BREACH, ERROR, OMISSION, INTERRUPTION, DELETION, OR DEFECT, DELAY IN OPERATION OR TRANSMISSION, COMPUTER VIRUS, COMMUNICATIONS LINE FAILURE, ANY THEFT, DESTRUCTION OR UNAUTHORIZED ACCESS TO, ALTERATION OF, OR USE OF RECORDS OR INFORMATION ARISING OUT OF OR RELATED TO USE OF THIS SITE, OR THE COST OF ANY PRODUCT OR SERVICE OBTAINED THROUGH THIS SITE, OR STATEMENTS OR CONDUCT OF ANY THIRD PARTY USING THE SITE, OR ANY CONTENT, ADVICE, OPINION, STATEMENT OR OTHER INFORMATION DISPLAYED AT THIS SITE OR ANY LINKED SITE. THE FOREGOING LIMITATIONS OF LIABILITY SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE. IN NO EVENT SHALL THE TOTAL LIABILITY OF MGIC TO YOU FOR ALL DAMAGES, LOSSES AND CLAIMS EXCEED THE AMOUNT PAID BY YOU TO MGIC, IF ANY, FOR ACCESSING THIS SITE.

FOR PURPOSES OF ALL THE LIMITATIONS OF LIABILITY AND DAMAGES SET FORTH IN THIS AGREEMENT: "YOU" SHALL BE DEFINED AS THE USER, ITS REPRESENTATIVES, EMPLOYEES, SUCCESSORS, ASSIGNS, ALL PERSONS CLAIMING BY OR THROUGH SUCH USER AND ANY PERSON WHO ACCESSES AND USES THIS SITE. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF CERTAIN WARRANTIES OR THE LIMITATION OR EXCLUSION OF LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES. ACCORDINGLY, SOME OF THE FOREGOING LIMITATIONS MAY NOT APPLY TO YOU.

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Notices

Notices to Users of secured pages within the Site may be made via e-mail or regular mail. MGIC also may provide notices of changes to these Terms, Rules applicable to particular services offered through secured pages within the Site, or other matters by displaying notices or links to notices on the Site. Notices to MGIC should be given by regular or certified mail addressed to Mortgage Guaranty Insurance Corporation, 250 East Kilbourn Avenue, Milwaukee, Wisconsin 53202, Attention: General Counsel.

Ownership of Information

Except as set forth in another agreement in effect between MGIC and you or as otherwise specified in these Terms, any information, suggestions, questions, comments or other communications or material you transmit to the Site will become the property of MGIC and will not be treated as confidential by MGIC. MGIC may use all such information, communications and materials without obligation to you. However, MGIC will not release your name or otherwise publicly identify you as the source of any information unless MGIC has received your permission or is required to do so by law.

General Provisions

Neither these Terms nor your use of this Site will create any agency, partnership, joint venture or other relationship between MGIC and you. These Terms constitute the entire agreement between MGIC and you pertaining to your use of this Site, and supersede any and all prior agreements, offers, proposals, representations and understandings between MGIC and you relating to this Site. Failure by MGIC to exercise or enforce any right or provision shall not constitute a waiver of such right or provision. If any of these Terms is determined by a court of competent jurisdiction to be invalid or unenforceable to any extent, it is agreed that the court should attempt to give effect to the intentions expressed by these Terms and the remaining Terms shall not be affected by such determination and shall be enforced to the fullest extent permitted by law. You agree that notwithstanding any law to the contrary, any claim relating to these Terms or this Site must be commenced within one year of the circumstance or event giving rise to such claim or forever be barred. Terms which are expressly stated to be effective upon or survive these Terms or termination of your use of this Site shall survive the termination of your use of this Site, regardless of the reason for termination.

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Privacy Policy

Please see Privacy Statement for information concerning MGIC's privacy policy.

Secured Pages

Some of the functions available through the Site are provided on a private basis only to customers, vendors or other entities which have registered with MGIC. If there is a conflict between the Terms and the provisions of the agreement, if any, in effect between the User and MGIC (a "User Agreement"), the provisions of the User Agreement will control. MGIC may post rules ("Rules") on the Site which are applicable to specific services offered through secured pages. All Rules posted on the Site by MGIC are incorporated by reference into these Terms.

Access to secured pages may be controlled through the assignment of User Name IDs and Passwords. You are responsible for maintaining the confidentiality of the User Name ID and any Passwords assigned to you by MGIC, and are fully responsible for all activities that occur under your User Name ID and Password. You agree to notify MGIC immediately of any unauthorized use of your User Name ID or Password or any other breach of security pertaining to use of this Site. If MGIC reasonably believes that you have provided any registration information that is false, misleading, inaccurate or incomplete, MGIC may terminate or suspend your access to and use of the Site. You agree that any termination or suspension of your access to this Site may be effected without prior notice and without liability to you.

For your protection, MGIC monitors and adheres to recognized industry information security practices to safeguard the information you exchange with MGIC over secured pages. MGIC has been certified by Cybertrust Corporation, an independent company which provides certification of organizations that have addressed Cybertrust Corporation's requirements for achieving and maintaining a sound information security posture. In order to obtain certification, MGIC was evaluated on overall network architecture, connectivity, physical security, redundancy and disaster recovery capabilities, environmental controls, system configurations, and operational policy compliance. Cybertrust Corporation security analysts work with MGIC to monitor continually MGIC's adherence to evolving essential practices, including performing follow-up reviews of MGIC. However, no one can guarantee that any Internet transmission will be free from unlawful or unauthorized interruption or interception.

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Risk Factors/Disclaimers

In addition to the above information, Investors should read the following additional Terms carefully.

No Offer of Securities

This Site contains information relating to certain securities of MGIC Investment Corporation (the "Company"). All such information is provided for general informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any of the Company's securities. Any offer of the Company's securities will be made only in accordance with the terms of the applicable offering documents which are not contained in this Site. Investors considering purchasing the Company's securities should consult with their own financial and legal advisors for information about the securities, the risks and investment considerations arising from an investment in the Company's securities, the appropriate tools to analyze the investment, and the suitability of the investment in each investor's particular circumstance.

Third Party Information

This Site includes information about the Company's securities which is provided by third parties and links to public information about the Company that are provided by third parties. While such information is presented in good faith and believed to be correct, the Company does not warrant the accuracy or completeness of such information or the reliability of any advice, opinion, statement or other information displayed or distributed through this Site. UNDER NO CIRCUMSTANCES WILL THE COMPANY BE LIABLE FOR ANY LOSS OR DIRECT, INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES CAUSED BY RELIANCE ON SUCH INFORMATION OR FOR THE RISKS OF THE STOCK MARKET.

Historical Performance

This Site includes information about the Company's historical financial performance. Past performance, however, is no guarantee of future results.

Forward-Looking Statements

This Site may contain certain "forward-looking statements" concerning the Company's anticipated financial performance, business prospects, future business plans, financial condition or other matters. Forward-looking statements consist of statements which relate to matters other than historical fact. Among others, statements that include words such as the Company "believes," "anticipates," or "expects," or words of similar import, are forward-looking statements. Forward-looking statements about the Company could be affected by the risk factors discussed below. These factors may also cause actual results to differ materially from the results contemplated by forward-looking statements that the Company may make.

The Company is not undertaking any obligation to update any forward-looking statements that appear in this Site.

Risk Factors

The Company's revenues and losses could be affected by the risk factors discussed below. These risk factors are the ones that appear in the last Form 10-K or 10-Q report that we filed with the SEC and they are not updated until our next 10-K or 10-Q filing.

As the domestic economy deteriorates, more homeowners may default and the Company's losses may increase.

Losses result from events that reduce a borrower's ability to continue to make mortgage payments, such as unemployment, and whether the home of a borrower who defaults on his mortgage can be sold for an amount that will cover unpaid principal and interest and the expenses of the sale. Favorable economic conditions generally reduce the likelihood that borrowers will lack sufficient income to pay their mortgages and also favorably affect the value of homes, thereby reducing and in some cases even eliminating a loss from a mortgage default. A deterioration in economic conditions generally increases the likelihood that borrowers will not have sufficient income to pay their mortgages and can also adversely affect housing values.

The mix of business the Company writes also affects the likelihood of losses occurring. In recent years, a greater percentage of the Company's volume than in the past has included segments that the Company views as having a higher probability of claim, including loans with LTV ratios over 95%, FICO credit scores below 620 or limited underwriting, including limited borrower documentation.

Approximately 8% of the Company's risk in force written through the flow channnel, and more than half of the Company's risk in force written through the bulk channel, consists of ARMs. The Company believes that during a prolonged period of rising interest rates, claims on ARMs would be substantially higher than for fixed rate loans, although the performance of ARMs has not been tested in such an environment. In addition, the Company believes the volume of "interest-only" loans has recently increased. Because interest-only loans are a relatively recent development, the Company has no data on their historical performance. The Company believes claim rates on certain interest-only loans will be substantially higher than on comparable loans requiring amortization. Interest-only loans may also be ARMs.

The performance of the servicing function on a mortgage loan, particularly a subprime loan, can affect the likelihood that the loan will default as well as the loss resulting from a default. The Company believes Select Portfolio Servicing ("Select") f/k/a Fairbanks Capital Corp. is the servicer of approximately 1.1% of the loans insured by the Company and approximately 5.2% of the loans insured by the Company written through the bulk channel (a substantial number of which are subprime). In 2003, the servicer ratings assigned to Select by Moody's and S&P were downgraded to "below average" due in part to concerns expressed by those rating agencies about Select's regulatory compliance and operational controls. In the second quarter of 2004, these rating agencies raised Select's service ratings to "average."

Competition or changes in the Company's relationships with its customers could reduce the Company's revenues or increase its losses.

Competition for private mortgage insurance premiums occurs not only among private mortgage insurers but also with mortgage lenders through reinsurance transactions. In these transactions, a lender's affiliate reinsures a portion of the insurance written by a private mortgage insurer on mortgages originated or serviced by the lender.

The level of competition within the private mortgage insurance industry has also increased as many large mortgage lenders have reduced the number of private mortgage insurers with whom they do business. At the same time, consolidation among mortgage lenders has increased the share of the mortgage lending market held by large lenders.

Our private mortgage insurance competitors include:

  • PMI Mortgage Insurance Company
  • Genworth Financial f/k/a GE Capital Mortgage Insurance Corporation
  • United Guaranty Residential Insurance Company
  • Radian Guaranty Inc.
  • Republic Mortgage Insurance Company
  • Triad Guaranty Insurance Corporation
  • CMG Mortgage Insurance Company

Assured Guaranty Limited f/k/a AGC Holdings Limited, a financial guaranty company whose mortgage insurance business is primarily reinsurance, has announced that it intends to write investment grade mortgage guaranty insurance on a direct basis.

If interest rates decline, house prices appreciate or mortgage insurance cancellation requirements change, the length of time that the Company's policies remain in force could decline and result in declines in our revenue.

In each year, most of the Company's premiums are from insurance that has been written in prior years. As a result, the length of time insurance remains in force (which is also generally referred to as persistency) is an important determinant of revenues. The factors affecting the length of time the Company's insurance remains in force include:

  • the level of current mortgage interest rates compared to the mortgage coupon rates on the insurance in force, which affects the vulnerability of the insurance in force to refinancings, and
  • mortgage insurance cancellation policies of mortgage investors along with the rate of home price appreciation experienced by the homes underlying the mortgages in the insurance in force.

During the 1990s, the Company's year-end persistency ranged from a high of 87.4% at December 31, 1990 to a low of 68.1% at December 31, 1998. At September 30, 2004 persistency was at 59.4%, compared to the record low of 44.9% at September 30, 2003. Over the past several years, refinancing has become easier to accomplish and less costly for many consumers. Hence, even in an interest rate environment favorable to persistency improvement, the Company does not expect persistency will approach its December 31, 1990 level.

If the volume of low down payment home mortgage originations declines, the amount of insurance that the Company writes could decline which would reduce the Company's revenues.

The factors that affect the volume of low down payment mortgage originations include:

  • the level of home mortgage interest rates,
  • the health of the domestic economy as well as conditions in regional and local economies,
  • housing affordability,
  • population trends, including the rate of household formation,
  • the rate of home price appreciation, which in times of heavy refinancing can affect whether refinance loans have loan-to-value ratios that require private mortgage insurance, and
  • government housing policy encouraging loans to first-time homebuyers.

In general, the majority of the underwriting profit (premium revenue minus losses) that a book of mortgage insurance generates occurs in the early years of the book, with the largest portion of the underwriting profit realized in the first year. Subsequent years of a book generally result in modest underwriting profit or underwriting losses. This pattern of results occurs because relatively few of the claims that a book will ultimately experience occur in the first few years of the book, when premium revenue is highest, while subsequent years are affected by declining premium revenues, as persistency decreases due to loan prepayments, and higher losses.

If all other things were equal, a decline in new insurance written in a year that followed a number of years of higher volume could result in a lower contribution to the mortgage insurer's overall results. This effect may occur because the older books will be experiencing declines in revenue and increases in losses with a lower amount of underwriting profit on the new book available to offset these results.

Whether such a lower contribution would in fact occur depends in part on the extent of the volume decline. Even with a substantial decline in volume, there may be offsetting factors that could increase the contribution in the current year. These offsetting factors include higher persistency and a mix of business with higher average premiums, which could have the effect of increasing revenues, and improvements in the economy, which could have the effect of reducing losses. In addition, the effect on the insurer's overall results from such a lower contribution may be offset by decreases in the mortgage insurer's expenses that are unrelated to claim or default activity, including those related to lower volume.

The amount of insurance the Company writes could be adversely affected if lenders and investors select alternatives to private mortgage insurance.

These alternatives to private mortgage insurance include:

  • lenders structuring mortgage originations to avoid private mortgage insurance, such as a first mortgage with an 80% loan-to-value ratio and a second mortgage with a 10%, 15% or 20% loan-to-value ratio (referred to as 80-10-10, 80-15-5 or 80-20 loans, respectively) rather than a first mortgage with a 90%, 95% or 100% loan-to-value ratio,
  • investors holding mortgages in portfolio and self-insuring,
  • investors using credit enhancements other than private mortgage insurance or using other credit enhancements in conjunction with reduced levels of private mortgage insurance coverage, and
  • lenders using government mortgage insurance programs, including those of the Federal Housing Administration and the Veterans Administration.

While no data is publicly available, the Company believes that 80-10-10 loans and related products are a significant percentage of mortgage originations in which borrowers make down payments of less than 20% and that their use, which the Company believes is primarily by borrowers with higher credit scores, continues to increase.

Changes in the business practices of Fannie Mae and Freddie Mac could reduce the Company's revenues or increase its losses.

The business practices of Fannie Mae and Freddie Mac affect the entire relationship between them and mortgage insurers and include:

  • the level of private mortgage insurance coverage, subject to the limitations of Fannie Mae and Freddie Mac's charters, when private mortgage insurance is used as the required credit enhancement on low down payment mortgages,
  • whether Fannie Mae or Freddie Mac influence the mortgage lender's selection of the mortgage insurer providing coverage and, if so, any transactions that are related to that selection,
  • whether Fannie Mae or Freddie Mac will give mortgage lenders an incentive, such as a reduced guaranty fee, to select a mortgage insurer that has a "AAA" claims-paying ability rating to benefit from the lower capital requirements for Fannie Mae and Freddie Mac when a mortgage is insured by a company with that rating,
  • the underwriting standards that determine what loans are eligible for purchase by Fannie Mae or Freddie Mac, which thereby affect the quality of the risk insured by the mortgage insurer and the availability of mortgage loans,
  • the terms on which mortgage insurance coverage can be canceled before reaching the cancellation thresholds established by law, and
  • the circumstances in which mortgage servicers must perform activities intended to avoid or mitigate loss on insured mortgages that are delinquent.

The mortgage insurance industry is subject to litigation risk.

Consumers are bringing a growing number of lawsuits against home mortgage lenders and settlement service providers. In recent years, seven mortgage insurers, including the Company's MGIC subsidiary, have been involved in litigation alleging violations of the Real Estate Settlement Procedures Act, which is commonly known as RESPA. MGIC's settlement of the litigation against it under RESPA became final in October 2003. There can be no assurance that MGIC will not be subject to future litigation under RESPA.

In March 2003, an action against MGIC was filed in Federal District Court in Orlando, Florida seeking certification of a nationwide class of consumers who were required to pay for private mortgage insurance written by MGIC and whose loans were insured at less than MGIC's "best available rate" based on credit scores obtained by MGIC. The action alleges that the Federal Fair Credit Reporting Act ("FCRA") requires a notice to borrowers of such "adverse action" and that MGIC has violated FCRA by failing to give such notice. The action seeks statutory damages (which in the case of willful violations, in addition to punitive damages, may be awarded in an amount of $100 to $1,000 per class member) and/or actual damages of the persons in the class, and attorneys fees, as well as declaratory and injunctive relief. The action also alleges that the failure to give notice to borrowers in Florida in the circumstances alleged is a violation of Florida's Unfair and Deceptive Acts and Practices Act and seeks declaratory and injunctive relief for such violation. In December 2003, the Court denied MGIC's motion seeking dismissal of the portion of the case covering damages under FCRA but dismissed the remainder of the case. In June 2004, the Court denied the plaintiffs motion to certify the class. There can be no assurance that the outcome of the litigation will not materially affect the Company's financial position or results of operations. Similar actions are pending against six other mortgage insurers.

Net premiums written could be adversely affected if the Department of Housing and Urban Development reproposes and adopts a regulation under the Real Estate Settlement Procedures Act that is equivalent to a proposed regulation that was recently withdrawn.

The regulations of the Department of Housing and Urban Development under the Real Estate Settlement Procedures Act prohibit paying lenders for the referral of settlement services, including mortgage insurance, and prohibit lenders from receiving such payments. In July 2002, the Department of Housing and Urban Development proposed a regulation that would exclude from these anti-referral fee provisions settlement services included in a package of settlement services offered to a borrower at a guaranteed price. HUD withdrew this proposed regulation in March 2004. Under the proposed regulation, if mortgage insurance was required on a loan, the package must include any mortgage insurance premium paid at settlement. Although certain state insurance regulations prohibit an insurer's payment of referral fees, had this regulation been adopted in this form, the Company's revenues could have been adversely affected to the extent that lenders offered such packages and received value from the Company in excess of what they could have received were the anti-referral fee provisions of the Real Estate Settlement Procedures Act to apply and if such state regulations were not applied to prohibit such payments.

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