MGIC - Mortgage Guaranty Insurance Corp.

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  • Wikipedia -  MGIC_Investment_Corporation - [link] 
    • 1957, the company was founded in Milwaukee by Max H. Karl, a real estate attorney
    • 1982, Karl sold the company to Baldwin United for $1.2 billion.
      • 1985 - MGIC was liquidated and its assets sold to Northwestern Mutual for $775 million.[6]
    • 1985 - That same year, Karl and others set up a new company with the same name.[2]
      • In 1987, Bill Lacy was appointed chairman and chief executive officer of the company. Lacy died in 2016.[7]
      •  In 1995, the founder of the company, Max H. Karl, died.[2]
    • In 1985, Citibank (the principal subsidiary of Citicorp) acquired majority control of Ambac Inc., parent company of AMBAC.
      • Other investors, including Xerox Corp., Ambac management, and Stephens Inc., an investment banking firm, held the remaining equity.
  • Byrnes Gives Up Stock Profit: Rep. John W. Byrnes (R Wis.), chairman of the House Republican Policy Committee, Nov. 9 acknowledged that in September 1960 he bought stock in the Mortgage Guaranty Insurance Corp. of Milwaukee and an affiliated company, at a preferential price, after helping MGIC with a federal tax problem.
    • The stock was purchased at $2.50 a share at a time when brokers were offering it to the public at prices ranging from $8.70 to $23.37 a share.
    • Byrnes later said he did not learn until long after the purchase, which had been recommended by a friend who was a company official, that he had purchased shares restricted to company executives, and that the sale to him had violated regulations against preferential sales to the public.
    • He said the purchase price was $2,300 and that the shares were currently worth roughly $26,000.
  • Max H. Karl, president of MGIC, told the Senate Rules Committee in 1964 that the tax ruling had played a large role in the company's success.
  • RELATED DEVELOPMENT – Nov. 11 – The Federal Home Loan Bank Board Nov. 11 announced that it would investigate possible conflicts of interest between directors of MGIC and the federal savings and loan institutions insured by the firm.
    • The MGIC directors included officials of the firm's largest customers, including some banks with federal charters.

library.cqpress.com/cqalmanac/document.php?id=cqal63-1315438

  • MGIC. Testimony in December 1963 and January 1964 by business associates of Baker disclosed that between 1959 and 1963 he had built up sizable holdings in the stock of the Mortgage Guaranty Insurance Corp. (MGIC) of Milwaukee, Wis., frequently using the credit of his friends to borrow the needed funds. Robert F. Thompson, an official of a Dallas, Texas, construction firm owned by the wealthy Murchison family, testified in January that on several occasions he arranged large loans from a Dallas bank, sometimes not requiring Baker to sign the note, so that he and Baker could buy stock, principally in MGIC. Also in January testimony, Don B. Reynolds, an insurance man and associate of Baker's, said that he had been invited in 1958 or 1959 to join Thomas D. Webb Jr., a Washington representative of the Murchisons, to lobby on behalf of MGIC “to convince Washington of the need of private enterprise taking over” the whole field of mortgage guarantees, including the business conducted by the Veterans Administration and the Federal Housing Administration. A letter from Max H. Karl, president of MGIC, to Baker, introduced in testimony in January, disclosed that in 1963 Karl had sought Baker's assistance in Congress to obtain for MGIC the Government's mortgage insurance business. Karl testified in January 1964 that Baker held stock in MGIC valued at $217,000, which made him one of the company's largest outside stockholders, (p. 950)
  • (The success of MGIC, which had become a highly lucrative investment for Baker and other stockholders, was attributed in part to a favorable ruling by the Internal Revenue Service (IRS) in 1960. Rep. John W. Byrnes (R Wis.), who had been instrumental in getting IRS to reverse an earlier ruling unfavorable to MGIC, Nov. 21, 1963, said he had made a substantial profit from MGIC stock purchased at preferential prices after the IRS ruling. He said that he had disposed of the stock and given the profits to charity in order to clear his name of any possible conflict of interest. 1963 Almanac p. 1105)

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