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PMI STOCKS IMPERILED ON SHUTDOWN OF GOVT TALK AND OVER SUPPLY OF PMI STOCKS
The "Enact" ipo(act) has loaded the PMI SECTOR with competing shares causing the market prices to fall.
Democrats Move to Avert Shutdown, but Divisions Imperil Biden’s Agenda
Democrats prepared a spending bill to keep the government funded past a Thursday deadline, but moderates dug in harder against their ambitious social safety net bill.
Asked if she were concerned about votes on the infrastructure bill, Speaker Nancy Pelosi said, “One hour at a time.”
Asked if she were concerned about votes on the infrastructure bill, Speaker Nancy Pelosi said, “One hour at a time.”Credit...T.J. Kirkpatrick for The New York Times
Emily CochraneJim Tankersley
By Emily Cochrane and Jim Tankersley
Published Sept. 29, 2021
Updated Sept. 30, 2021, 10:54 a.m. ET
Follow our live news coverage on the government shutdown and infrastructure bill.
WASHINGTON — Democrats prepared legislation on Wednesday to avert a government shutdown this week, but they were desperately trying to salvage President Biden’s domestic agenda as conservative-leaning holdouts dug in against an ambitious $3.5 trillion social safety net and climate bill that carries many of the party’s top priorities.
Congressional leaders moved to address the most immediate threat, working to complete a bill to prevent a government funding lapse at midnight on Thursday. Yet after days of intensive negotiations to bridge bitter differences in their party over Mr. Biden’s two biggest legislative priorities, the president and top Democrats appeared as far as ever from an agreement on their marquee social policy package, which the White House calls the Build Back Better plan.
That, in turn, was imperiling a $1 trillion bipartisan infrastructure bill that was scheduled for a House vote on Thursday.
The fate of the two measures could define the success of Mr. Biden’s presidency, and the intense negotiations surrounding them have posed a test of his skills as a deal maker, which he highlighted as a calling card during his campaign for the White House. But after days of personal meetings with lawmakers in the Oval Office and phone calls to key players, Mr. Biden remained far
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Dramatizing the challenge, Senator Joe Manchin III of West Virginia, a leading holdout on the social policy bill, issued a lengthy and strongly worded statement on Wednesday evening reiterating his opposition to the proposal as currently constituted, saying it amounted to “fiscal insanity.”
“While I am hopeful that common ground can be found that would result in another historic investment in our nation, I cannot — and will not — support trillions in spending or an all-or-nothing approach that ignores the brutal fiscal reality our nation faces,” Mr. Manchin wrote, denouncing an approach that he said would “vengefully tax for the sake of wishful spending.”
The statement was the polar opposite of what Mr. Biden and top Democrats had hoped to extract from Mr. Manchin and other centrist critics of the bill by week’s end — a firm public commitment to eventually vote for the social policy measure, in order to placate liberals who want to ensure its enactment.
Instead, it further enraged progressives who were already promising to oppose the infrastructure bill until Congress acted on the larger social policy plan, which Democrats plan to push through using a fast-track process known as budget reconciliation to shield it from a filibuster. They have been pressing to push off the infrastructure vote until after votes on the reconciliation bill — or, at the very least, after the centrist holdouts provided a firm sense of what they would accept in that package.
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“I assume he’s saying that the president is insane, because this is the president’s agenda,” Representative Pramila Jayapal, Democrat of Washington and the leader of the Congressional Progressive Caucus, said of Mr. Manchin. “Look, this is why we’re not voting for that bipartisan bill until we get agreement on the reconciliation bill. It’s clear we’ve got a ways to go.”
“I tell you, after that statement, we probably have even more people willing to vote ‘no’ on the bipartisan bill,” she added.
The impasse left unclear the fate of the infrastructure measure. While a handful of centrist Republicans plan to support it, G.O.P. leaders are urging their members to oppose it, leaving Democrats who hold a slim majority short of votes to pass the bill if progressives revolt.
“The plan is to bring the bill to the floor,” Speaker Nancy Pelosi told reporters, returning to Capitol Hill after huddling at the White House with Mr. Biden and Senator Chuck Schumer of New York, the majority leader. Asked whether she was concerned about the votes, she added, “One hour at a time.”
Continue reading the main story
She spoke shortly after the House passed legislation lifting the statutory limit on federal borrowing until Dec. 16, 2022, an effort to avert a catastrophic federal debt default next month when the Treasury Department says it will breach the current cap.
Senate Republicans blocked a Democratic effort to pair the increase with a spending bill to keep the government funded, and are likely to oppose the House-passed bill, which was approved on a nearly party-line vote of 219 to 212 on Wednesday.
But even as the debt ceiling remained unresolved, Senate leaders scheduled a series of votes for Thursday morning on legislation that would keep the government open through early December and provide crucial aid for disaster relief efforts and Afghan refugees. The House is expected to take up the legislation soon afterward to avoid a shutdown Thursday night.
Politics Updates
Updated
Sept. 30, 2021, 11:17 a.m. ET1 hour ago
1 hour ago
The Senate will vote on a Republican bid to curtail help for Afghans who were evacuated during the U.S. withdrawal.
Paring back the $3.5 trillion social policy bill would be tough, but there are possibilities.
Manchin and Sinema: Two key Democrats whose votes could decide the fate of Biden’s agenda.
Much of the urgency on Wednesday was focused on salvaging the president’s agenda, after Mr. Biden and his aides cleared his schedule on Wednesday in an attempt to broker a deal among Democrats.
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Some Democrats have complained this week that the president has not engaged in talks to their satisfaction. He welcomed groups of progressives and moderates to the White House last week, for example, but met with each separately, as opposed to holding a group negotiating session.
And efforts by Mr. Biden and his team to pressure Mr. Manchin and Senator Kyrsten Sinema of Arizona, another Democratic holdout on the reconciliation bill, appear to have fallen flat. Officials have been working for days to persuade the pair to specify how much they would be willing to spend on the package, calculating that such a commitment would allay the worries of progressives now refusing to support the infrastructure bill.
“Joe Biden is the only president in American history to have passed a relief package of the significance of the American Rescue Plan with zero margin for error in the Senate and three votes to spare in the House,” said Andrew Bates, a spokesman for the White House, referring to the $1.9 trillion pandemic relief package that became law in March. “He knows how to make his case, he knows how to count votes, and he knows how to deliver for the American middle class.”
Both Ms. Sinema and Mr. Manchin visited the White House on Tuesday, but after their meetings, neither they nor White House officials would enumerate the contours of a bill they could support. Top White House officials also trekked to Capitol Hill on Wednesday to huddle privately with Ms. Sinema for more than two hours.
“The president felt it was constructive, felt they moved the ball forward, felt there was an agreement, that we’re at a pivotal moment,” Jen Psaki, the White House press secretary, told reporters on Tuesday, characterizing the meetings. “It’s important to continue to finalize the path forward to get the job done for the American people.”
Mr. Biden held conversations with various lawmakers throughout the day on Wednesday and planned to continue them on Thursday, White House officials said.
Image
Senator Kyrsten Sinema of Arizona and other centrist holdouts haven’t provided a firm sense of what they would accept in the reconciliation bill.
Senator Kyrsten Sinema of Arizona and other centrist holdouts haven’t provided a firm sense of what they would accept in the reconciliation bill.Credit...Sarahbeth Maney/The New York Times
Privately, administration officials said Mr. Biden was continuing to take an encouraging role with Mr. Manchin and Ms. Sinema, and not demanding they agree to anything immediately. Both senators have yet to publicly do so, even as liberal Democrats continue to publicly fume over the reticent.
In his statement on Wednesday, Mr. Manchin said he wanted to set income thresholds for many of the social program expansions Democrats have proposed. He suggested that he would be open to undoing some components of the 2017 tax cut.
Moderate House Democrats, who helped secure a commitment for a vote this week on the infrastructure bill, warned that a failed vote would worsen the already deep mistrust between the two factions of the party.
“If the vote were to fail tomorrow or be delayed, there would be a significant breach of trust that would slow the momentum in moving forward on delivering the Biden agenda,” said Representative Stephanie Murphy of Florida, one of the moderates who sought to decouple the two plans.
Even as they labored to work out philosophical differences in their party on the bill, Democrats suffered yet another setback on Wednesday when the Senate’s top rules enforcer rejected a second proposal to include a path to legal status for about eight million undocumented immigrants in the reconciliation bill.
In a memo obtained by The New York Times, Elizabeth MacDonough, the Senate parliamentarian, wrote that the policy change “vastly outweighs its budgetary impact,” effectively disqualifying it from inclusion in a measure whose contents must have a direct impact on the federal budget.
In their latest effort, Democrats had proposed moving up the date for a process known as immigration registry, which allows otherwise law-abiding undocumented immigrants who have been in the United States continuously since a certain date to adjust their status and gain a pathway to citizenship. The current date, established in 1986, is set at Jan. 1, 1972. Democrats had sought to change that date to Jan. 1, 2010.
After days of personal meetings with lawmakers in the Oval Office and phone calls to key players, President Biden remained far short of a deal.
After days of personal meetings with lawmakers in the Oval Office and phone calls to key players, President Biden remained far short of a deal. Credit...Doug Mills/The New York Times
Last week, Ms. MacDonough rejected Democrats’ initial proposal to grant legal status to several categories of undocumented people, including those brought to the United States as children, known as Dreamers; immigrants who were granted Temporary Protected Status for humanitarian reasons; people working in the country under nonimmigrant visas; close to one million farmworkers; and millions more who are deemed “essential workers.
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She said those changes to immigration law could not be included, under the Senate rules, in the reconciliation package because they represented a “tremendous and enduring policy change that dwarfs its budgetary impact.”
Democrats said they would continue to look for alternative strategies to aid immigrants through the reconciliation proceed."
STOCK MARKETS TANKS BE CAREFUL!
S&P 500 down 1.5% this morning ??.
"CoreLogic: 1.2 Million Homes with Negative Equity in Q2 2021"
From CoreLogic: Homeowners Gained $2.9 Trillion in Equity in Q2 2021, CoreLogic Reports
CoreLogic® ... today released the Homeowner Equity Report for the second quarter of 2021. The report shows U.S. homeowners with mortgages (which account for roughly 63% of all properties) have seen their equity increase by 29.3% year over year, representing a collective equity gain of over $2.9 trillion, and an average gain of $51,500 per borrower, since the second quarter of 2020.
...
“The growth in homeowner equity provides a strong financial cushion for tens of millions Americans. For those most impacted by the pandemic, equity gains will help play a critical role in staving off foreclosure,” said Frank Martell, president and CEO of CoreLogic. “Based on projected increases in economic activity and home values over the next year, we expect to see further gains in equity and a corresponding drop in negative equity, forbearance rates and foreclosure.”
...
Negative equity, also referred to as underwater or upside down mortgages, applies to borrowers who owe more on their mortgages than their homes are currently worth. As of the second quarter of 2021, negative equity share, and the quarter-over-quarter and year-over-year changes, were as follows:"
Foreclosure Starts Rise Following Moratorium Expiration
Sep 22 2021, 1:08PM
MORTGAGE NEWS DAILY
BY: JANN SWANSON
"Delinquencies hit a new post-pandemic low in August as the national delinquency rate fell by 84,000 loans or 3.48 percent compared to July. It was 41.84 percent below the level in August of 2020. Black Knight, in its "first look" at the months loan performance data, said the 1.122 million loans that were 30 or more days past due but not in foreclosure, were down by 1.557 million on an annual basis. In January of 2020, one month before the first cases of COVID-19 were reported, the national delinquency rate was 3.3 percent.
Serious delinquencies, those loans 90 or more days past due but not in foreclosure, remain elevated, but even they have been improving steadily. Serious delinquencies fell 108,000 from July and are down more than 1 million from the level in August 2020. Still, 1.339 million loans remain in that bucket, 930,000 more than before the pandemic.
There was an uptick in foreclosure starts during the month, not surprising since the federal foreclosure moratorium ended at the end of July. The 7,000 starts represented a 69 percent increase from July and was 18.33 percent higher year-of-year. Most of these loans had been in the foreclosure process prior to the moratorium. Foreclosure activity is still well below more "normal" levels, there were 80 percent fewer starts last month than in August 2019.
The foreclosure inventory, the number of loans in the process of foreclosure, increased by 2,000 during the month to 142,000 loans. A year earlier the inventory contained nearly 200,000 distressed loans.
The single month mortality (prepayment) rate increased 9.0 percent to a 2.21 percent rate. Low interest rates continue to spur both refinance and purchase activity.
Black Knight will provide a more in-depth review of the August loan performance data in its monthly Mortgage Monitor report. It will be published on Oct. 4, 2021."
MTG IS BEING MANIPULATED BE CAREFUL
AS long as the acquisition underway expect unusual volatility.
MGIC MGMT REITERATE COMMITMENT TO PURCHASE $291 MILLION IN COMPANY STOCK
THE ONLY UPDATE AT BARCLAYS GLOBAL FINANCIAL CONFERENCE WAS TO REPURCHASE COMPANY STOCK $291 MILLION BY END OF 2021.
ON TUESDAY, SEPT 14, 2021 MGIC WILL PRESENT AT THE BARCLAYS GLOBAL FINANCIAL SERVICES CONFERENCE
EXPECT UPDATES IN FOLLOWING AREAS OF THE BUSINESS:
1, Share repurchase program, which has been restarted in Q3 2021. At the end of June 30, 2021. MGIC INVESTMENT CORPORATION had $291 million available for share repurchases.
2, Update on Insurance In Force. MGIC had an industry leading $265.8 billion outstanding as of July 31, 2021.
3, Delinquent Inventory as of August 31, 2021. Defaults declined from 45,101 loans on May 31, 2021 to 41,411 loans as of July 31, 2021.
RADIAN statistical information for August 31, 2021 revealed, that DELINQUENCIES are accelerating downward.
RADIAN DELINQUENCIES DECLINES ACCELERATE IN AUGUST AS CURES INCREASE
DELINQUENCIES DECLINE 6798 So far in Q3 2021.
June 2021 July 2021 August 2021
MTG (MGIC)SHARE REPURCHASE PROGRAM RESTARTS NOW $291 MILLION AVAILABLE
"Share repurchase programs
At the current market price for MTG, they can repurchase 19 million shares.
Due to the uncertainty caused by the COVID-19 pandemic, we had temporarily suspended stock repurchases but intend to resume them in the third quarter."
We may repurchase up to an additional $291 million of our common stock through the end of 2021 under a share repurchase program approved by our Board of Directors in 2020."
Source: pg 32, SEC 10Q JUNE 2021
BLACK KNIGHT’S FIRST LOOK AT JULY 2021 MORTGAGE DATA: FORECLOSURES MUTED
Overall Mortgage Delinquencies Edge Closer to Pre-Pandemic Levels, But 1.45M Remain Seriously Past Due as Foreclosure Moratorium Expired at End of July
August 20, 2021 Data & Analytics
The national delinquency rate saw a 5% reduction in July and at 4.14% is now down by nearly half since May of last year
Delinquencies have now improved in 12 of the last 14 months, with the two monthly increases being calendar-related as opposed to being indicative of worsening performance
While overall delinquency volumes continue to edge closer to pre-pandemic levels, the number of serious delinquencies were still significantly elevated as federal foreclosure moratoria expired at the end of July
Some 1.45 million borrowers remained 90 or more days past due – but not yet in foreclosure – entering August, more than 1 million more than at the onset of the pandemic
Foreclosure starts remained muted in July, the final month of the foreclosure moratorium on federally backed mortgages, down 58% from the same time last year
While the number of loans in active foreclosure fell by 5,000 to yet another record low, potential foreclosure activity in the coming months warrants close observation
After rising in June, prepayment activity slid by 11% in July; however, low 30-year rates in recent weeks have resulted in a modest resurgence in refinance incentive which may impact August prepay numbers
JACKSONVILLE, Fla. – Aug. 20, 2021 – Black Knight, Inc. reports the following “first look” at July 2021 month-end mortgage performance statistics derived from its loan-level database representing the majority of the national mortgage market.
NECK TO TOP OF DOUBLE BOTTOM SHOULD BE $15.14 TO $16.50 FOR MTG
As double bottom unfolds on MTG should run to above $16.50/share.
MTG COMPLETING SHORT-TERM DOUBLE BOTTOM
LOOK FOR CONFIRMATION AT $15.05
Here's a chart:
https://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Stock&symb=MTG&x=36&y=13&time=18&startdate=1%2F4%2F1999&enddate=7%2F26%2F2021&freq=8&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=8&lf=512&lf2=16&lf3=268435456&type=64&style=350&size=2&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11
Overall Mortgage Delinquencies Edge Closer to Pre-Pandemic Level"
But 1.45M Remain Seriously Past Due as Foreclosure Moratorium Expired at End of July
August 20, 2021
Data & Analytics
The national delinquency rate saw a 5% reduction in July and at 4.14% is now down by nearly half since May of last year
Delinquencies have now improved in 12 of the last 14 months, with the two monthly increases being calendar-related as opposed to being indicative of worsening performance
While overall delinquency volumes continue to edge closer to pre-pandemic levels, the number of serious delinquencies were still significantly elevated as federal foreclosure moratoria expired at the end of July
Some 1.45 million borrowers remained 90 or more days past due – but not yet in foreclosure – entering August, more than 1 million more than at the onset of the pandemic
Foreclosure starts remained muted in July, the final month of the foreclosure moratorium on federally backed mortgages, down 58% from the same time last year
While the number of loans in active foreclosure fell by 5,000 to yet another record low, potential foreclosure activity in the coming months warrants close observation
After rising in June, prepayment activity slid by 11% in July; however, low 30-year rates in recent weeks have resulted in a modest resurgence in refinance incentive which may impact August prepay numbers.
https://www.blackknightinc.com/black-knights-first-look-at-july-2021-mortgage-data/
MGIC BEATS EARNINGS ESTIMATES AND INCREASED BOOK VALUE TO $14.48
MGIC added $4,000 to each reserve for loan losses INVENTORY for a total of $171 million. They ended the quarter with an average reserve per delinquency of $21,147 vs. $17,147 in Q1 2021.
Average claim payments declined to $29.9k from $50.5k in Q1 2021. The decline is attributed to higher home values.
New insurance written was $33.6 billion from $30.8 billion in Q1 2021. Insurance in Force increased to $262 billion from $251.7 billion in Q1 2021.
Overall MGIC had a great quarter, continuing to lead the PMI INDUSTRY.
PMI COMPANIES BEAT ANALYST ESTIMATES IN Q2 2021
RADIAN BEAT ANALYST ESTIMATES BY $.05 AND BOOK VALUE JUMPS 11% YEAR OVER YEAR TO $23.02. Revenues were in line as expected at $337 million vs $332 million.
NMI HOLDINGS BEAT ANALYST ESTIMATES BY $.03. BOOK VALUE INCREASED TO $17.03 FROM $16.07 IN Q1 2021. Revenues were $120.77 million vs estimates of $120.27 million.
MGIC is set to report earnings after the close of the market today.
MGIC EARNINGS FOR Q2 A BLOWOUT OF ANALYST ESTIMATES ~ $.55 or 25% higher
Based on a revenue match and substanial cost reductions in incurred cost from delinquencies declines of approximately $151 million net cash.
CURRENT BOOK VALUE $13.95. Q2 2021 BOOK VALUE ESTIMATED $14.75.
SURGING REAL ESTATE PRICES PART OF BULLISH THEORETICAL UNDERPINNINGS FOR PMI COMPANIES
"Prices of the Most and Least Expensive U.S. Homes Are Surging the Fastest
REDFIN
July 30, 2021 by Lily Katz
Luxury-home prices soared 26% year over year in the second quarter, while prices of the most affordable homes grew 19%. Both segments outpaced the rest of the market.
The median sale price of U.S. luxury homes jumped 25.8% year over year in the second quarter, while the median sale price of the country’s most affordable homes rose 18.7%. By comparison, prices of mid-priced and affordable homes grew just 16% and 13.2%, respectively."
https://www.redfin.com/news/real-estate-price-tier-report-q2-2021/
MGIC INCREASES QUARTERLY DIVIDEND BY 33%
https://mtg.mgic.com/news-releases/news-release-details/mgic-investment-announces-quarterly-dividend-008-share
PMI INDUSTRY ANALYST NEED TO UPDATE THEIR EARNINGS ESTS., MGIC HEADED FOR BLOWOUT
I estimate MGIC will have net cash of $151 million from DELINQUENCY reduction alone in Q2, that works out to about $.44 cents.
BARRON'S RECOMMENDS MGIC(MTG) WITH A $17 PRICE TAG
BARRON'S believes MGIC is a value play that exceeds all other PMI COMPANIES.
CURRENT BOOK VALUE IS $13.95 with an expectancy of $15.50 BY SEPTEMBER 30, 2021(Q3 2021).
https://www.google.com/amp/s/www.barrons.com/amp/articles/buy-mortgage-insurer-stocks-51624556955
MTG/ PMI STOCKS SET TO SKYROCKET AS REVENUES GAIN AND EXPENSES DECLINE FOR Q2 AND H2 2021
Currently, PMI COMPANIES are seeing the best economic conditions since 2018 and pre-covid pandemic.
MGIC WILL EASILY EXCEED THEIR EARNINGS FORECAST FOR NEXT FEW QUARTERS AND 2021.
Mortgage News Daily
"BY: JANN SWANSON
Delinquencies Fall Below Pre-Great Recession Average
Jul 22 2021, 1:15PM
The national delinquency rate dropped by 7.62 percent in June and is now 42.39 percent below its rate at the worst of the pandemic. Black Knight, in its monthly report, says the June rate, at 4.37 percent, was also back below its pre-Great Recession average.
Still, there are 2.32 million homeowners who are 30 or more days past due on their mortgage payments. Even though this is 191,000 fewer delinquent mortgages than in May and 1.714 million fewer than in June 2020, most of those loans, 1.550 million of them, are seriously delinquent, having missed three or more monthly payments. While that is four times the number of seriously delinquent loans that existed prior to the pandemic, it still represents continued improvement. Serious delinquencies are down 119,000 month-over-month and there was an annual decline of 324,000 loans.
Though serious delinquencies remain significantly elevated, the share of mortgages in active foreclosure fell to yet another record low in June at 0.27 percent, in part due, no doubt, to the ongoing foreclosure moratoria. Foreclosure starts did rise by 16 percent to 4,400.
Delinquency rates were highest in Mississippi, Louisiana, Hawaii, Oklahoma, and West Virginia. None of those rates exceeded 8.0 percent.
Lower interest rates resulted in the single month mortality (SMM) or prepayment rate rising for the first time in three months. The 2.28 percent rate was 6.23 percent higher than in May and 160.5 percent above the rate in June of last year.
This information was provided as Black Knight’s “first look” at the June loan performance data. More detailed information will be provided in its next Mortgage Monitor which will be published on August 2."
EXISTING HOME SALES SKYROCKET AND PRICES TOO * PRESENTING BULLISH ECONOMIC BACKDROP
The Economic environment is extremely bullish for PMI COMPANIES THIS SUMMER
"Investor Home Purchases Hit Record, Surpassing Pre-Pandemic Levels
July 22, 2021
by Lily Katz and Sheharyar Bokhari
Investors took the housing market by storm in the second quarter—buying up $49 billion worth of homes—as surging property prices and rental demand created opportunities for hefty profits.
Multifamily properties remain the most popular among investors, but single-family homes and condos are gaining steam.
Relatively affordable metros including Phoenix and Miami, which have jumped in popularity during the pandemic, are the top markets for investors.
Real estate investors purchased 67,943 U.S. homes in the second quarter of 2021—the highest quarterly figure on record. That’s up 15.1% from the prior quarter, and up 106.7% from the second quarter of 2020, when activity in the housing market was stalled due to pandemic restrictions.
In dollar terms, investors bought a record $48.5 billion worth of homes in the second quarter, up from $38.9 billion in the prior quarter and $20.9 billion a year earlier. The typical home they purchased cost $439,600—23.7% higher than a year earlier—amid surging housing prices.
We define an investor as any institution or business that purchases residential real estate. When we refer to a “record” in this report, the record dates back to the year 2000."
https://www.wsj.com/articles/median-existing-home-price-hit-new-high-in-june-116269630737
MTG ESTIMATED BOOK VALUE FOR Q2 $14.50-$14.75, Q3 2021 $15.25
BASED ON EXCEPTIONAL EARNINGS AS MGIC INVESTMENT RELEASES UP $2 IN BOOK VALUE RELATED TO EARNINGS NET CASH AND, THE RELEASE OF LOAN LOSSES AND LOAN RELATED EXPENSES, MGIC BOOK VALUE WILL MOVE MUCH HIGHER.
Pandemic related claims have fail to appear and claim losses are declining due to broad based gains in the US REAL ESTATE MARKET VALUES.
All indications are that claims cost will continue to moderate going forward. The US BANKING AND FINANCIAL INSTITUTIONS ARE RELEASING RESERVE'S BUILD IN ANTICIPATION OF A PANDEMIC CRISIS, THAT HAS FAILED TO APPEAR.
MGIC AND RADIAN SET UP TO BENEFIT FROM GSE REVERSAL OF MORTGAGE FEE
"Mortgage refinance fee dropped by regulator, lowering costs for borrowers"
PUBLISHED FRI, JUL 16 20211:08 PM EDTUPDATED FRI, JUL 16 20218:22 PM EDT
Diana Olick
@IN/DIANAOLICK
@DIANAOLICKCNBC
@DIANAOLICK
KEY POINTS
Fannie Mae and Freddie Mac are dropping a fee on mortgage refinances that was instituted during the pandemic, according to the Federal Housing Finance Agency.
They were charging lenders a 50 basis-point fee for all loans they delivered to the two mortgage giants, which was designed to cover losses projected as a result of the pandemic.
Fannie Mae building exterior and logo
Fannie Mae and Freddie Mac are dropping a fee on mortgage refinances that was instituted during the pandemic, lowering costs for borrowers, the Federal Housing Finance Agency said Friday.
Fannie and Freddie were charging lenders a 50 basis-point fee for all loans that were delivered to the two mortgage giants. The fee, designed to cover losses projected as a result of the pandemic, was being passed on to borrowers."
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.
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**
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