MGIC shares drop after lawsuit disclosure

NEW YORK_Shares of MGIC Investment Corp. tumbled after the mortgage insurer disclosed it was being sued by Bank of America's mortgage unit in a dispute over claims.

The suit was filed Dec. 17, according to MGIC's filing with the Securities and Exchange Commission on Tuesday.

The complaint alleges that MGIC "denied and continues to deny" valid mortgage insurance claims submitted by Bank of America's Countrywide unit.

Bank of America says MGIC denied claims based on "unreasonable interpretations" of its policies. MGIC said it intends to defend itself against the allegations.

Shares of MGIC were down 61 cents, or nearly 10 percent, to $5.75, in afternoon trading.