Mortgage insurers MGIC and Radian said overnight they would scrap a planned merger. The two US insurers announced plans to merge in February.
At the time both were making plans to enter Australia's mortgage insurance market. MGIC now has a licence to do so and is in the early stages of drumming up business.
The fall-out from the US sub-prime mortgage losses has hammered the share prices of the two insurers, with those of MGIC down 56 per cent and those of Radian down 70 per cent since the pair announced plans to merge.
Radian told
Reuters that they were likely to sell C-BASS, a subprime mortgage investment vehicle, back to management with most of the investment written off.