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PANDEMIC HOME LOSSES FAILED TO APPEAR BIG BANKS RELEASE LOSS RESERVES IN Q2
"The four largest U.S. consumer banks posted blockbuster second-quarter results this week, after pandemic loan losses failed to materialize and the U.S. economy began roaring back to life.
Wells Fargo & Co (WFC.N), Bank of America Corp (BAC.N), Citigroup Inc (C.N) and JPMorgan Chase & Co (JPM.N) posted a combined $33 billion in profits, buoyed by the release of $9 billion in reserves they had put aside last year to absorb feared pandemic losses.
That was beyond analyst estimates of about $24 billion combined, compared with $6 billion in the year-ago quarter.
Consumer spending has climbed, sometimes beyond pre-pandemic levels, while credit quality has improved and savings and investments have risen, the banks said.
Thanks to extraordinary government stimulus and loan repayment holidays, feared pandemic losses have not materialized. A national vaccination roll-out has allowed also Americans get back to work and to start spending again."
CLAIMS FOR Q2 2021 MINUS LOAN LOSSES EQUALS $151 MILLION NET CASH POSITIVE
CLAIMS 343
CLAIMS COST $17 MILLION
DELINQUENT INVENTORY REDUCTION $168 MILLION
= $151 MILLION NET CASH
LOAN LOSS DEVELOPMENT IS PART OF THE EQUATION HOWEVER, THE DELINQUENCY INVENTORY TREND IS DECLINING.
SO, LOAN LOSSES DEVELOPMENT WILL MOST LIKELY BE POSITIVE FOR THE QUARTER FOR THE NET RESERVES
MGIC REMOVES $168 MILLION IN DELINQUENT LOANS IN Q2 2021
MGIC DELINQUENT LOANS DECLINED BY 9,776 TO 42,999 FROM 52,775 IN MARCH 31, 2021, IN Q2 AS BORROWERS CAUGHT UP ON DELINQUENCIES AND OTHERS RESTRUCTURED THEIR LOAN BALANCES.
At the end of the quarter 34% of new delinquency was under forbearance, while 55% of delinquent inventory were in forbearance.
What will MGIC do with the cash?
Add more to reserves for loan losses and #2) Show higher profits in Q2 2021.
FHFA AND FHA ANNOUNCE NEW GUIDELINES FOR HOMEOWNERS EXITING FORBEARANCE
*Even though foreclosures remain at record lows, MGIC and PMI delinquency inventories will benefit from these new programs and procedures for servicers processing exits from forbearance plans*
*Of the 146,000 plans reviewed this week, 44,000 homeowners left forbearance, while the plans of 102,000 were extended*
*An estimated 7.25 million borrowers have participated in forbearance programs at one point or another throughout the pandemic, representing 14% of all homeowners with mortgages, according to Black Knight. About 72% of all participants have since left their plans, while 28%, or just more than 2 million, remain in active forbearance*
Fannie Mae, Freddie Mac and the FHA this week published new guidelines to help borrowers whose plans are expiring. Part of that includes more interest rate reduction in loan modifications to help keep borrowers in their homes.
“Allowing more families to qualify for an interest rate reduction will prevent unnecessary foreclosures, help strengthen the Enterprises’ books of business, and make sustainable homeownership a reality for more families currently living with the uncertainty of forbearance,” said acting FHFA Director Sandra Thompson.
The CFPB - Consumer Financial Protection Bureau is overlooking the process to make sure that homeowners are treated fairly and, they are given every benefit possible.
Black Knight's First Look: Number of Seriously Past-Due Loans Continues to Improve
°Foreclosure inventory hit yet another new record low as both moratoriums and borrower forbearance plan participation continue to limit activity, keeping foreclosure starts near record lows as well
Though Long Holiday Weekend Drives Up May's Overall Delinquency Rate
- The national delinquency rate rose to 4.73% from 4.66% in April, driven largely by the three-day Memorial Day weekend foreshortening available payment windows
- Similar occurrences are rare; the last time was in May 2004, at which time mortgage delinquencies jumped by more than 15% in a single month; this month saw a 1.5% increase
- Early-stage delinquencies (those 30 or 60 days past due) rose by 110,200 in May, while serious delinquencies (90 or more days but not yet in foreclosure) improved for the ninth consecutive month
- Despite this improvement, nearly 1.7 million first-lien mortgages remain seriously delinquent, 1.26 million more than there were prior to the pandemic
- Foreclosure inventory hit yet another new record low as both moratoriums and borrower forbearance plan participation continue to limit activity, keeping foreclosure starts near record lows as well
- Mortgage prepayments fell to their lowest level in more than a year, driven by falling refinance activity as well as purchase-related headwinds
Black Knight, Inc. Logo (PRNewsfoto/Black Knight, Inc.)
NEWS PROVIDED BY
Black Knight, Inc.
Jun 23, 2021, 09:00 ET
JACKSONVILLE, Fla., June 23, 2021 /PRNewswire/ -- Black Knight, Inc. (NYSE:BKI) reports the following "first look" at May 2021 month-end mortgage performance statistics derived from its loan-level database representing the majority of the national mortgage market.
Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 4.73%
Month-over-month change: 1.51%
Year-over-year change: -39.05%
Total U.S. foreclosure pre-sale inventory rate: 0.28%
Month-over-month change: -2.46%
Year-over-year change: -26.14%
Total U.S. foreclosure starts: 3,800
Month-over-month change: 2.70%
Year-over-year change: -25.49%
Monthly prepayment rate (SMM): 2.15%
Month-over-month change: -16.88%
Year-over-year change: -6.26%
Foreclosure sales as % of 90+: 0.12%
Month-over-month change: -12.01%
Year-over-year change: 38.92%
Number of properties that are 30 or more days past due, but not in foreclosure: 2,511,000
Month-over-month change: 11,000
Year-over-year change: -1,612,000
Number of properties that are 90 or more days past due, but not in foreclosure: 1,669,000
Month-over-month change: -99,000
Year-over-year change: 1,038,000
Number of properties in foreclosure pre-sale inventory: 148,000
Month-over-month change: -5,000
Year-over-year change: -52,000
Number of properties that are 30 or more days past due or in foreclosure: 2,659,000
Month-over-month change: 6,000
Year-over-year change: -1,665,000
MGIC PERSISTENTCY IN Q2 2021 SHOULD IMPROVE AS APPLICATION VOLUME HAS DECLINED
MGIC AND RADIAN PREMIUM YIELDS will be higher in Q2.
MGIC INSURANCE IN FORCE WILL CONTINUE TO LEAD THE PMI INDUSTRY.
Monday $15 print wow green moon here comes green.
PMI DEFAULT INVENTORY STATISTICS FOR MAY 31, 2021 DECLINE TREND CONTINUES
NMI HDGS.
APRIL 30, 10,060
MAY 31, 2021. 9,387
DECLINE 673
(7.2%)
RADIAN
APRIL 30, 45,679
MAY 31,. 42,802
DECLINE 2,877
(6.3%)
MGIC
APRIL 30, 45,101
MAY 31, 47,825
DECLINE. 2724
(5.7%)
ESSENT GUARANTY
EG decided to stop publishing monthly default statistics.
The PMI COMPANIES have established reserves in the event that delinquent inventory actually results in losses.
Those covid-19 pandemic defaults appear to be mostly curing. If, you take loans that been caught up and release the loan loss reserves for MGIC INVESTMENT based the April and May 2021, first two months of Q2 2021, MGIC would have additional cash flow/profit of **$132 MILLION**
Oh so close come on $15.
RADIAN DEFAULTS DECLINED 6.8% AND NMI HOLDINGS DECLINED 2.04% IN MAY 2021
MGIC IS MOST LIKELY TO REPORT SIMULAR NUMBERS TO RADIAN WHEN THEY REPORT. LIKEWISE ESSENT GUARANTY IS LIKELY TO REPORT SIMILAR NUMBERS TO NMI HOLDINGS WHEN THEY REPORT.
RADIAN AND NMI HOLDINGS SHOW SUBSTANTIAL REDUCTION IN IN DELINQUENCY INVENTORY IN MAY
https://www.radian.com/news-and-knowledge/news?id=21571
NMI Holdings, Inc. Releases Monthly Operating Statistics for May 2021
Jun 03, 2021
PDF Version
EMERYVILLE, Calif., June 03, 2021 (GLOBE NEWSWIRE) -- NMI Holdings, Inc. (Nasdaq: NMIH) today reported selected operating statistics for the month of May 2021. At May 31, 2021, the company reported 9,387 loans in default and a default rate of 2.04%.
Default Activity as of:
3/31/20 6/30/20 9/30/20 12/31/20 3/31/21 4/30/21 5/31/21
Number of loans in default (1) 1,449 10,816 13,765 12,209 11,090 10,060 9,387
Default rate (2) 0.38% 2.90% 3.60% 3.06% 2.54% 2.24% 2.04%
New Insurance Written During:
Quarter
Ended
3/31/20 Quarter
Ended
6/30/20 Quarter
Ended
9/30/20 Quarter
Ended
12/31/20 Quarter
Ended
3/31/21 Month
Ended
4/30/21 Month
Ended
5/31/21
Weighted average composition
FICO 757 762 764 761 755 754 754
Loan-to-value (LTV) 91.3 % 90.7 % 90.7 % 90.9 % 91.0 % 91.3 % 91.4 %
Debt-to-income (DTI) 34.4 % 33.3 % 32.8 % 33.2 % 33.6 % 34.4 % 34.5 %
In-focus risk segments
95.01-97.0% LTV 6.4 % 4.2 % 3.2 % 9.5 % 9.3 % 9.1 % 9.0 %
<680 FICO 1.9 % 1.0 % 0.7 % 1.0 % 1.9 % 3.2 % 3.8 %
>45% DTI 10.3 % 7.0 % 4.9 % 6.1 % 6.7 % 9.8 % 11.6 %
Layered risk (3) 0.2 % 0.1 % 0.1 % 0.1 % 0.1 % 0.3 % 0.7 %
(1) Loans are considered to be in default as of the payment date at which a borrower has missed the preceding two or more consecutive monthly payments
(2) Default rate is calculated as total loans in default divided by total policies in force
SHORT INTEREST HOLDERS ABANDON SHORT TRADE ON MGIC, 16.63MM REFERENCE JUNE 2020
SHORT INTEREST RETREATS TO JUNE 2020 BALANCE. MTG now free to go higher.
At the height of short interest was 34 million in January 2021, now 16.63 million according to to Wallstreet Journal.
SHORT INTEREST (05/14/21)
Shares Sold Short 16.63 M
Change from Last -5.30%
Percent of Float 4.94%
"UPSTART PMI COMPANIES" REMAIN UNDER RESERVED COMPARED TO MGIC AND RADIAN
IT'S TIME TO LEVEL PLAYING THE FIELD BETWEEN LEGACY COMPANIES AND UPSTARTS.
MGIC AND RADIAN ARE BETTER CAPITALIZED AND UNDERVALUED STOCK PRICED.
MGIC is showing more growth than so-called growth PMIs. MGIC is increasing marketshare metric above all companies in the industry and, RADIAN is returning more capital to shareholders than most companies.
Today MGIC'S price/BOOK is 1.01 and RADIAN's price to book is 1.03 vs. 1.46 for ESSENT and NMI HOLDINGS with P/B is 1.38.
By the way, PMI INDUSTRY P/B are well below S&P 500 FINANCIALS WHICH ARE CURRENTLY AVERAGING price/books IN EXCESS OF 2.00.
PMIs. will most likely start releasing there excess reserves in Q2 that they built up for the covid-19 pandemic. MGIC has reserves equivalent to $3.00 book value of $913 million and claims incurred cost of only 4.2% of reserves for loan losses/$38 million in Q1 2021.
INSURANCE IN FORCE JUMPS 1.4%/$3.4 BILLION IN APRIL 2021 AS MGIC LEADS THE PMI INDUSTRY
MGIC CLOSED Q1 2021 AT $251.7 BILLION. RADIAN'S INSURANCE IN FORCE DECLINED TO $238.9 BILLION FROM $246.1 BILLION. ESSENT GUARANTY DECLINED TO $197.1 BILLION, NMI HOLDINGS INCREASED TO $123.7 BILLION.
MGIC INSURANCE IN FORCE INCREASED TO $255.1 BILLION IN APRIL FROM $251.7 BILLION. THE ANALYSTS WERE IMPRESSED DURING THE EARNINGS CONFERENCE.
BUT WAIT!, MGIC DELINQUENCY INVENTORY DECLINED BY AN IMPRESSIVE 4,950 LOANS TO 47,825 LOANS FROM 52,775. THAT WAS THE LARGEST ONE MONTH DECLINE IN OVER 7 YEARS.
The reserve per DELINQUENCY is $17,147. That's a $85.2 million reduction, that theoretically could be added to income in Q2 2021.
UPDATE: MGIC SHORT INTEREST DOWN ANOTHER 8.89% TO 17.56 MILLION
SHORT INTEREST (04/30/21)
Shares Sold Short 17.56 Million
Change from Last period .. -8.89%
WALL STREET JOURNAL
PREVIOUSLY: "SHORT INTEREST HOLDERS MGIC ABANDONED 33% OF THEIR SHORT INTEREST SHARES AS MTG MOVES HIGHER
Short interest holders made a strategic move to reduce their short interest holdings by 33%/9.49 million starting in late March 2021, as MTG moved higher.
Short interest started March 16, 2021 at 28.77 million. They ended the April 15, 2021 period at 19.28 million.
Short interest holders had acquired short interest shares starting in June 1-15, 2020, when short interest stood at approximately 15 million, increasing short interest to about 34 million in early January 2021."
SHORT INTEREST HOLDERS MGIC ABANDONED 33% OF THEIR SHORT INTEREST SHARES AS MTG MOVES HIGHER
Short interest holders made a strategic move to reduce their short interest holdings by 33%/9.49 million starting in late March 2021, as MTG moved higher.
Short interest started March 16, 2021 at 28.77 million. They ended the April 15, 2021 period at 19.28 million.
Short interest holders had acquired short interest shares starting in June 1-15, 2020, when short interest stood at approximately 15 million, increasing short interest to about 34 million in early January 2021.
DETAILED SUMMARY OF Q1 2021 PROVES MGIC'S FINANCIAL STRENGTH
While most "PMI heavy hitters" chose to strengthen their "reserves for loan losses and lae", MGIC excelled off their financial strength.
MGIC wrote #1 new insurance written of $30.8 billion, ESSENT GUARANTY pulled back and wrote #5 new insurance written $19.3 billion. NMI HOLDINGS wrote a notable $26.4 billion.
MGIC topped the five PMI COMPANIES with INSURANCE IN FORCE of $251.7 billion.
MGIC and RADIAN reserves per default increased to $17K. They are both positioned to report reserves as income once the delinquencies from the covid-19 pandemic continue to decline.
MGIC LEAD COMPANIES WITH A RISK-TO-CAPITAL 8.8:1.
Q1 2021 EARNINGS REVIEW OF FIVE PMI COMPANIES
Companies reviewed:
MGIC
ESSENT GUARANTY
RADIAN
NMI HOLDINGS
GENWORTH TO KNOWN AS "ENACT"
NEW INSURANCE WRITTEN #1 MGIC
ADJUSTED NET INCOME #1 MGIC
INSURANCE IN FORCE #1 MGIC
NET CASH FLOW #1 MGIC
With the highest reserve per delinquency, MGIC is well positioned to take advantage of declining delinquencies going forward.
MGIC Q1 2021 FINANCIAL RESULTS
"Primary Average Direct Reserve Per Delinquency $17,147."
Source Q1 FINANCIAL RESULTS REPORTS
BAD TIME FOR GENWORTH TO ANNOUNCE IPO FOR IT'S PMI UNIT AS PMI STOCK PRICES DECLINE
"The company aims to raise as much as $541 million, offering 22.57 million shares at a price range between $20 and $24 per share. Net proceeds from the offering will go to Genworth Holdings, which will retain roughly 80% ownership in the mortgage unit, a spokesperson for the company said."
https://www.insurancebusinessmag.com/us/news/breaking-news/genworth-announces-ipo-rebrands-into-enact-holdings-254136.aspx
PROMISES TO REPURCHASE COMPANY STOCK MANY TIMES GO UNFILLED
ESSENT GUARANTY promises to buy $250 million in stock by the end of 2022. However, manytimes those promises aren't kept due unforseen obstacles. In the case of MGIC COVID-19.
ESSENT GUARANTY promises it will BUYBACK $250 million in company shares to makeup for a bad two quarters, when it missed estimates and under performed.
In Q1 2021, ESSENT GUARANTY lost marketshare, decreased insurance in force, came in last in new insurance written. So, does making a promise to REPURCHASE COMPANY STOCK makeup for a poor performance?
MGIC SEC 10-K 2020
"Share repurchase programs
In the first quarter of 2020 and in the full year of 2019, we repurchased
approximately 9.6 million and 8.7 million shares of our common stock,
respectively, using approximately $120 million and $114 million,
respectively, of holding company resources. As of December 31, 2020, we
had $291 million of authorization remaining to repurchase our common
stock through the end of 2021 under a share repurchase program approved
by our Board of Directors in January 2020. Repurchases may be made
from time to time on the open market (including through 10b5-1 plans) or
through privately negotiated transactions. The repurchase programs may
be suspended for periods or discontinued at any time. Due to the
uncertainty caused by the COVID-19 pandemic, we have temporarily
suspended stock repurchases, but may resume them in the future.
The following table shows details of our share repurchase programs.
Repurchase
Program Expiration Date
Repurchased (in
millions)
Authorization
Remaining
(in millions)
2018 Authorization December 31, 2019 $ 200 $ —
2019 Authorization December 31, 2020 $ 200 $ —
2020 Authorization December 31, 2021 $ 9 $ 291
As of December 31, 2020, we had approximately 339 million shares of
common stock outstanding."
OF FIVE PMI COMPANIES REVIEWED FOR Q1 2021, ESSENT NIW WAS LOWEST AND IIF DECLINED
"Insurance in force as of March 31, 2021 was $197.1 billion, compared to $198.9 billion as of December 31, 2020 and $165.6 billion as of March 31, 2020.
New insurance written for the first quarter was $19.3 billion, compared to $29.6 billion in the fourth quarter of 2020 and $13.5 billion in the first"quarter of 2020.
ESSENT GUARANTY MISSES Q1 2021 GUARANTEES TO BUYBACK STOCK BY 2022
https://www.google.com/amp/s/finance.yahoo.com/amphtml/news/essent-group-ltd-announces-first-103000395.html
Friday back over $15 I just know it.
Too bad the price stinks.
MGIC NET CASH FROM OPS JUMPS 20% YOY IN 2020
$198 MILLION IN Q1 2021 vs $181 MILLION in Q1 2020
MGIC IS HITTING ON ALL CYLINDERS IN CASH FLOW
SOURCE
SEC 10-Q Q1 2021
SEC 10-K 2020
MGIC Q1 2021 HIGHLIGHTS
First, bear in mind MGIC was
#1 in NIW IN Q1.
#1 IN IIF
First Quarter Summary
New insurance written was $30.8 billion, compared to $33.2 billion the fourth quarter of 2020 and $17.9 billion in the first quarter of 2020, reflecting the resilience of the purchase mortgage market, the attractive refinance market, and our position in the market.
Persistency, or the percentage of insurance remaining in force from one year prior, was 56.2% at March 31, 2021, compared with 60.5% at December 31, 2020 and 73.0% at March 31, 2020.
Insurance in force (IIF) of $251.7 billion at March 31, 2021 increased by 2.1% during the quarter and 11.6% compared to March 31, 2020.
Primary delinquency inventory of 52,775 loans at March 31, 2021 decreased from 57,710 loans at December 31, 2020, but increased from 27,384 loans at March 31, 2020 primarily due to the adverse economic impact of COVID-19.
Uneducated ugly folks selling. Astute intelligent smart brilliant genius good looking folks buying.
MGIC REPORT NOT THAT BAD
There was a lot of refinancing in Q1 2021 and they still managed to increase their portfolio.
MGIC: The Cash And Capital Positives Amid Confusing Earnings Reports https://seekingalpha.com/article/4424913-mgic-the-cash-and-capital-positives-amid-confusing-earnings-reports
Oh no down 87 cents in the after hours. Oh crap.
MGIC Investment EPS in-line, misses on revenue
May 05, 2021 4:47 PM ETMGIC Investment Corporation (MTG)By: Pranav Ghumatkar, SA News Editor
MGIC Investment (NYSE:MTG): Q1 Non-GAAP EPS of $0.42 in-line; GAAP EPS of $0.43 beats by $0.02.
Revenue of $297.96M (-2.9% Y/Y) misses by $4.71M.
The loss ratio for the first quarter of 2021 was 15.5%, compared to 17.5% for the fourth quarter of 2020 and 23.4% for the first quarter of 2020.
Shares -1.14%.
$13.95 BOOK VALUE AND REVS WERE SHORT
BTIG HAD EARNINGS AT $.44 VS $42.
https://mtg.mgic.com/news-releases/news-release-details/mgic-investment-corporation-reports-first-quarter-2021-results
Volume picking up in the after hours up 3 cents so far. Whales are circling around here and gobbling up the tasty treats.
Looking forward to seeing some blowout earnings today will be awesome for longs and investors.
Get ready for some earnings action in a few minutes.
RADIAN REPORT INSURANCE IN FORCE AND REVENUES AND BOOK VALUE DECLINE IN Q1 2021
"Total primary mortgage insurance in force as of March 31, 2021, declined to $238.9 billion, a decrease of 2.9 percent compared to $246.1 billion as of December 31, 2020, and a decrease of 1.1 percent compared to $241.6 billion as of March 31, 2020."
https://radian.com/news-and-knowledge/news?id=21341
MGIC Investment Q1 2021 Earnings Preview
May 04, 2021 5:35 PM ETMGIC Investment Corporation (MTG)By: Khyathi Dalal, SA News Editor
MGIC Investment (NYSE:MTG) is scheduled to announce Q1 earnings results on Wednesday, May 5th, after market close.
The consensus EPS Estimate is $0.42 (flat Y/Y) and the consensus Revenue Estimate is $302.67M (-1.4% Y/Y).
Over the last 2 years, MTG has beaten EPS estimates 100% of the time and has beaten revenue estimates 75% of the time.
Over the last 3 months, EPS estimates have seen 5 upward revisions and 0 downward. Revenue estimates have seen 3 upward revisions and 2 downward.
BOOK VALUES PMI COMPANIES VS SELLING PRICES
ESSENT GUARANTY MKT P. $52.29, BOOK $33.95
NMIH MKT PRICE $26.32, BOOK VALUE $16.08
RADIAN MKT PRICE $24.68, BOOK VALUE $22.45
MTG MKT PRICE $15.35, BOOK VALUE $13.88
Most companies reporting earnings this quarter have gone down after reporting because, all the good news is already priced into stocks.
Even companies reporting 50% earnings above analyst estimates have retreated.
The S&P 500's current "price to earnings ratios" exceed the "great depression" and "the dot com bubble's".
OVERALL MARKET SETUP FOR A CORRECTION PMI COMPANIES HAVE NO WHERE TO GO
All financial stocks including PMI COMPANIES, ARE SELLING IN EXCESS OF BOOK VALUES.
WHEN PMI COMPANIES REPORT EARNINGS, They have no where to go.
The VIX, a volatility index, has jumped up over 21.99, an increase of 13.98% increase.
What’s going on after hours ? News ?
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An Industry Leader
Our company has been serving the mortgage industry for more than 50 years. In today’s rapidly changing and challenging market, MGIC Investment Corporation (NYSE: MTG) remains committed to delivering superior shareholder returns by combining the best talent, analytics systems, products and processes.
MGIC Investment Corporation is headquartered in Milwaukee, Wisconsin, and is the parent company of Mortgage Guaranty Insurance Corporation (MGIC). Our strong history in the mortgage insurance industry allows us to offer mortgage insurance and risk management products and services to mortgage lenders as well as structured finance services to investors.
We're still the same MI company, doing the same quality business.
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