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ECONOMIC BACKDROP PAINTS A GOOD PICTURE FOR PMI COMPANY'S Q3 2020
Patrick Sink, former CEO for MGIC INVESTMENT COMPANY and current Vice CHAIRMAN once said that "when we have a strong real estate market, claims cost will decline.
Realtytrac foreclosures trends point to a low steady foreclosure trends: 39.8% in August vs 79.7% last year with actual auctions down 5.9 from the prior month.
https://www.realtytrac.com/statsandtrends/foreclosuretrends/
However, currently MGIC NEW INSURANCE WRITTEN IS AT RECORD LEVELS, as indicated in first half of the year.
"New insurance written was $28.2 billion, compared to $14.9 billion in the second quarter of 2019, reflecting the resilience of the purchase mortgage market, the attractive refinance market, and our position in the market" Timothy Mattke
NET CASH FLOW FROM OPERATIONS JUMPED IN THE FIRST SIX MONTHS OF 2020 to $420 MILLION FROM $282 MILLION AS OF JUNE 30, 2019. (SEC 10Q JUNE 30, 2020 page 11)
SO, in spite of the news about the pandemic "MGIC IS STILL HITTING ON ALL CYLINDERS".
PENDING HOMES SALES ALL-TIME HIGH, PMI COs. LOSSES TO DECLINE FOR Q3
EVER SINCE MGIC INVESTMENT COMPANY STARTED THE PMI INSURANCE INDUSTRY IN 1957, THEY HAVE MAINTAINED A CORRELATION WHERE: WHEN HOME SALES ARE APPRECIATING AND SALES ARE STRONG, LOAN LOSSES HAVE REMAINED LOW. - Patrick Sinks Co-Chairman
By JANN SWANSON
Mortgage News Daily
Pending Home Sales Just Hit a New All-Time High
Sep 30 2020, 9:52AM
Contracts for existing home purchases rose for the fourth straight month in August and more than doubled the increase expected by most analysts. The National Association of Realtors® (NAR) says its Pending Home Sales Index (PHSI) rose from 122.1 in July to 132.8 in August, an increase of 8.8 percent.
The PHSI, based on contracts to purchase existing single-family houses, townhouses, condos, and cooperative apartments, is now at an all time high and is 24.2 percent above its level in August 2019. The index is also up 44.6 points from the point to which it plunged in April after the widespread business closures and stay-at-home responses to the COVID-19 pandemic.
Most analysts had looked for a strong report, but still didn't come close to predicting the actual gains. Those polled by Econoday had looked for an increase between 2.0 and 4.0 percent with a consensus of 3.1 percent. Analysts forecasting for Trading Economics had a consensus increase of 3.4 percent.
"Tremendously low mortgage rates - below 3 percent - have again helped pending home sales climb in August," said Lawrence Yun, NAR's chief economist. "Additionally, the Fed intends to hold short-term fed funds rates near 0 percent for the foreseeable future, which should in the absence of inflationary pressure keep mortgage rates low, and that will undoubtably aid homebuyers continuing to enter the marketplace.
"While I did very much expect the housing sector to be stable during the pandemic-induced economic shutdowns, I am pleasantly surprised to see the industry bounce back so strongly and so quickly."
Given the record high level of the PHSI, Yun did try to somewhat dampen expectations. He noted that not all contracts lead to closings and that, combined with the usual variations in sampling and analysis, the index may not be followed by record sales numbers in the following months. He again noted as well that without an increase in the supply of available homes this level of recovery will not be sustainable.
"Home prices are heating up fast," he said. "The low mortgage rates are allowing buyers to secure cheaper mortgages, but many may find it harder to make the required down payment."
The increase in pending sales from July to August applied to all four of the nation's major regions and did double-digit year-over-year gains. The PHSI in the Northeast rose 4.3 percent to 117.1 in August, a 26.0 percent jump from a year ago. In the Midwest, the index rose 8.6 percent to 124.5 and was 25.0 percent higher than a year earlier.
Pending home sales in the South increased 8.6 percent to an index of 154.2 in August and was 23.6 percent higher year-over-year. The West saw a monthly increase of 13.1 percent and year-over-year gains of 23.6 percent. The region's index reads 120.3.
The PHSI is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months. Existing-Home Sales for July will be reported October 22.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.
AVG Q3 20' REDUCED DELINQUENCIES OF $45MM OR 13 CENTS/SHS.
MGIC DELINQUENCIES DECLINED BY ~4050 loans could be rolled into profits for Q3 2020 based on reduced loan losses as foreclosures continue to be half 2019 rates. MGIC LOSSES ACTIVITIES. CONTINUE DOWNWARD FOR FIVE YEARS STRAIGHT.
MGIC could add the $45 million to LOSS AND LOAN ADJUSTED EXPENSES however, that would depend on the loses outlook/forcast. With the real estate market continuing at a "white hot pace", I don't see any worries right now especially since "MGIC IS SWIMMING IN CAPITAL".
SHORT INTEREST MTG DOWN 1.03MM FROM 19.42MM TO 18.39MM
As of September 15, 2020 short interest stood at 18.39 million versus 19.42 million as of August 31, 2020, that's a 1.03.million reduction.
Over the same time, MTG went from $9.20 to $9.35. MTG now stands at $8.57/share.
Look under data for MTG short interest statistics:
https://www.wsj.com/market-data/quotes/MTG
NUMBER OF MORTGAGES EXITING FORBEARANCE ACCELERATING
BY: JANN SWANSON
MORTGAGE NEWS DAILY
Forbearances Ending at a Faster Pace
Sep 25 2020, 9:50AM
Black Knight said its weekly forbearance survey found the number of mortgages in active forbearance decreasing at an accelerated rate. Those mortgages fell by 2.6 percent or 95,000 loans over the last week, bring the decline over the last month to 357,000 loans. It was the fifth straight week of improvement and Black Knight noted that since peaking in late May, the total number of forbearances has fallen by 1.17 million or 24 percent.
As of September 22, 3.6 million homeowners remain in COVID-19-related forbearance plans, or 6.8 percent of all active mortgages, down from 7 percent last week. Together, they represent $751 billion in unpaid principal. Some 78 percent of those remaining loans have had their terms extended at some point since March.
There are 1.1 million plans still set to expire by the end of September as servicers work to assess them for termination or renewal. This is .6 million fewer potential expirations than a week earlier.
The largest decrease in plans of the previous week, 51,000 was among portfolio-held mortgages. The -8 percent change took the number down to 923,000 forbearances, 7.1 percent of portfolio-held/private label security (PLS) loans.
The number of GSE (Fannie Mae and Freddie Mac) loans fell by 20,000 or 2.3 percent during the week to 1.36 million or 4.8 percent of the company's combined portfolios. There were 17,000 fewer FHA/VA loans than the prior week, a 1.2 percent reduction. The remaining 1.348 million forborne loans are 11.1 percent of the FHA/VA loan totals.
AS HOME PRICES SOAR PMI COs LOSS MITIGATION TURNS PROFITS
IN CASES WERE HOMES ARE SOLD TO TO COVER LOANS AND HOMES ARE APPRECIATING IN VALUE, PMI COMPANY'S CAN TURN THOSE TRANSACTIONS INTO A PROFIT AS THEY ACQUIRE PROPERTIES.
MGIC HAS ACQUIRED PROPERTIES IN THE PAST IN CASES WERE HOMES ARE APPRECIATE IN VALUE.
"Our non-financial assets that are classified as Level 3 securities consist of real estate acquired through claim
settlement. The fair value of real estate acquired is the lower of
NEW HOMES SALES SURGE TO 14 YEAR HIGH
https://www.marketwatch.com/story/new-home-sales-surge-in-august-to-levels-not-seen-in-14-years-2020-09-24?mod=bnbh
××HOMES PRICES GAIN MOST EVER IN HISTORY××
Mortgage News Daily
BY: JANN SWANSON
FHFA Says 2-Month House Price Gain was Largest Ever
Sep 23 2020, 9:49AM
Home prices rose another 1.0 percent in July, bringing the year-over-year gain to 6.5 percent according to the House Price Index (HPI) produced by the Federal Housing Finance Agency (FHFA). The agency also revised its previously reported 0.9 percent price change for June 2020 to 1.0 percent.
All nine of the census divisions posted both month-over-month and annual price gains. Monthly changes ranged from an 0.6 percent increase in the West North Central division to 2.0 percent in New England. The 12-month changes were lowest in the West South Central division at 5.4 percent and the Mountain and the East South Central divisions tied for first place with increases of 7.7 percent.
SHORT INT 19.42 MM, POTENTIAL BUYBACKS BODES WELL FOR MTG
https://www.wsj.com/market-data/quotes/MTG
SHORTS HAVE BEEN PLAYING AROUND WITH APPROXIMATELY 20MM SHARES ALL SUMMER WITH A HIGH OF 24 MILLION IN EARLY JUNE AND A LOW OF 15 MILLION APPROXIMATELY.
BUT, NOW TROUBLE COULD BE ON THE HORIZON FOR SHORT INTEREST HOLDERS, AS DELINQUENTS DECLINE AT MGIC FREEING UP EVEN MORE CASH FOR MGIC.
MGIC HAS BEEN OPPORTUNISTICALLY RETIRING CONVERTIBLE DEBT TO ACQUIRE DILUTABLE SHARES AT LOWER STOCK PRICES
Q3 RESULTS TRENDING BETTER THAN EXPECTED AT MGIC, DELINQUENCIES LOWER REVENUES STABLE
TIM MATTKE, CEO MGIC AND ZIMMERMAN CFO stated that on current activities up to conference time Q3 are TRENDING BETTER THAN EXPECTED:
https://kvgo.com/barclays/mgic-september-2020
HOME PRICES UP 13% AS FORECLOSURES DECLINE 81% IN AUGUST YoY
Foreclosures data: https://www.realtytrac.com/statsandtrends/
"Home Prices Up 13%, Biggest Increase Since 2013
Redfin
September 11, 2020 by Tim Ellis
Buyers seem undeterred, as pending sales soar 28% and a 9% increase in new listings brings little relief.
Key housing market takeaways for 434 U.S. metro areas during the 4-week period ending September 6:
Median home sale price increased 13% from 2019 to $319,178—the highest on record. The 13% year-over-year increase was the largest since October 2013.
Pending home sales climbed 28% year over year, the largest increase since the four weeks ending August 2, 2015.
New listings of homes for sale were up 9% from a year ago—the largest increase since the four weeks ending December 20, 2015.
Active listings (the number of homes listed for sale at any point during the period) fell 28% from 2019 to a new all-time low. The year-over-year decline has been about the same for the past couple of months.
46.4% of homes that went under contract had an accepted offer within the first two weeks on the market, the highest level since at least 2012 (as far back as our data on this measure goes).
The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, rose to 99.3%—an all-time high and a full percentage point higher than a year earlier.
For the week ending September 6, the seasonally adjusted Redfin Homebuyer Demand Index was up 21% from pre-pandemic levels in January and February.
“Home price growth this high is making the housing market especially difficult for first-time homebuyers right now,” said Redfin chief economist Daryl Fairweather. “Rising prices are just one more reason for people to leave expensive urban neighborhoods behind. The sudden rise of remote work has allowed homebuyers who are priced out of one neighborhood to expand their search to more affordable areas. In turn, they are pushing up home prices in those relatively affordable areas, causing more people to look to even more affordable areas, and so on. Price growth may slow in 2021, but even if it does, high prices are going to continue to make affordability a concern for buyers.”
“I’ve been helping more buyers from out of town lately, mostly from the Bay Area,” said Seattle Redfin agent Christian Cerone. “They’re unfazed by the intensity of the market, since that’s been the norm there for quite a while. We’ve also started to see bidding wars even on homes above $1 million, which were seemingly immune to bidding wars even when the market got really crazy in recent years. With so much wealth coming into the city from more expensive places, there are plenty of buyers right now who have the potential to buy those $1-$2 million homes.”
GSEs LEAD DOWNWARD TREND OF LOANS IN FORBEARANCE
"Share of Mortgage Loans in Forbearance Declines to 7.01%
Sep 14, 2020
CONTACT
Adam DeSanctis
adesanctis@mba.org
(202) 557-2727
WASHINGTON, D.C. (September 14, 2020) - The Mortgage Bankers Association's (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 15 basis points from 7.16% of servicers' portfolio volume in the prior week to 7.01% as of September 6, 2020. According to MBA's estimate, 3.5 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 14th week in a row to 4.65% - a 15-basis-point improvement. Ginnie Mae loans in forbearance decreased 50 basis points to 9.12%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 28 basis points to 10.71%. The percentage of loans in forbearance for depository servicers decreased 19 basis points to 7.21%, while the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 8 basis points to 7.33%.
"The beginning of September brought another drop in the share of loans in forbearance, with declines in both GSE and Ginnie Mae forbearance shares. However, at least a portion of the decline in the Ginnie Mae share was due to servicers buying delinquent loans out of pools and placing them on their portfolios. As a result of this transfer, the share of portfolio loans in forbearance increased," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "Forbearance requests increased over the week, particularly for Ginnie Mae loans. With just under 1 million unemployment insurance claims still being filed every week, the lack of additional fiscal support for the unemployed could lead to even higher increases of those needing forbearance."
Key findings of MBA's Forbearance and Call Volume Survey - August 31 to September 6, 2020
Total loans in forbearance decreased by 15 basis points relative to the prior week: from 7.16% to 7.01%.
By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 9.62% to 9.12%.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 4.80% to 4.65%.
The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 10.43% to 10.71%.
By stage, 33.69% of total loans in forbearance are in the initial forbearance plan stage, while 65.35% are in a forbearance extension. The remaining 0.96% are forbearance re-entries.
Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.09% to 0.11%.
Weekly servicer call center volume:
As a percent of servicing portfolio volume (#), calls increased from 7.2% to 8.7%.
Average speed to answer increased from 2.4 minutes to 3.3 minutes.
Abandonment rates increased from 5.1% to 7.3%.
Average call length decreased from 7.8 minutes to 7.7 minutes.
Loans in forbearance as a share of servicing portfolio volume (#) as of September 6, 2020:
Total: 7.01% (previous week: 7.16%)
IMBs: 7.33% (previous week: 7.41%)
Depositories: 7.21% (previous week: 7.40%)"
DELINQUENCIES DECLINE BY 1580 LOANS IN AUGUST, CURE ACTIVITY EXCEEDS NEW NOTICES AGAIN IN AUGUST
https://mtg.mgic.com/news-releases/news-release-details/mgic-investment-corporation-releases-monthly-operating-31
Q3 FORECAST: RECORD MORTGAGE VOLUME, y/o/y FORECLOSURE DECLINE, DELINQUENCIES TREND LOWER - BLACK KNIGHT
BLACK KNIGHT FORECAST FOR Q3 AND DATA
Calculated Risk
Finance and Economics
MORTGAGE NEWS DAILY
Tuesday, September 08, 2020
Black Knight Mortgage Monitor for July: "Record-Low Rates, Largest Quarterly Volume on Record"
Black Knight released their Mortgage Monitor report for July today. According to Black Knight, 6.91% of mortgages were delinquent in July, down from 7.59% in June, and up from 3.46% in July 2019. Black Knight also reported that 0.36% of mortgages were in the foreclosure process, down from 0.49% a year ago.
This gives a total of 7.40% delinquent or in foreclosure.
Press Release: Black Knight: Surge in Refinance Lending Driven by Record-Low Rates Leads to Largest Quarterly Volume on Record; Just 18% of All Refinancing Borrowers Retained by Servicers
Today, the Data & Analytics division of Black Knight, Inc. released its latest Mortgage Monitor Report, based upon the company’s industry-leading mortgage performance, housing and public records datasets. This month, Black Knight looked at both Q2 2020 origination data as well as interest rate locks thus far in Q3 2020 to get a sense of how the lending market has fared in the era of COVID-19. As Black Knight Data & Analytics President Ben Graboske explained, a period of record-low interest rates has provided a much-needed backstop to the impact of shutdowns, unemployment and economic uncertainty.
“Despite the nation being under pandemic-related lockdowns for much of the quarter, a record-breaking surge in mortgage originations occurred in Q2 2020, driven by the record-low interest rate environment,” said Graboske. “Nearly $1.1 trillion in first lien mortgages were originated in Q2 2020, which is the largest quarterly origination volume we’ve seen since first reporting on the metric in January 2000. Refinance lending grew more than 60% from the previous quarter and more than 200% from the same time last year, accounting for nearly 70% of all Q2 originations by dollar value. At the same time, purchase lending declined 8% year-over-year as the traditional spring homebuying season was impacted by COVID-19-related restrictions. However, mortgage loan rate lock data – a leading indicator of lending activity – suggests that the homebuying season was simply pushed forward into the third quarter.
“Purchase locks in Q3 2020 have already made up for the losses of a COVID-impacted Q2 – and then some – based upon normal seasonal expectations. In fact, rate locks are suggesting that we could see Q3 purchase lending break typical seasonal trends and rise by 30-40%, which would push us to a new record high. Likewise, while Q2 refinance activity was record-breaking, refi lock data suggests Q3 refinance volumes could climb even higher. Locks on refinance loans expected to close in the third quarter, assuming a 45-day lock-to-close timeline, are already up 20% from Q2. With market conditions as they are and given the recent delay of the 50 basis points fee on GSE refinances until December, we would expect near-record low interest rates to continue to buoy the market. After all, there are still nearly 18 million homeowners with good credit and at least 20% equity who stand to cut at least 0.75% off their current first lien rate by refinancing.”
emphasis added
Forbearances Decrease by 4%
Mortgage News Daily
BY: JANN SWANSON
Sep 4 2020, 8:42AM
The number of homeowners with mortgages in COVID-19 related forbearance plans dropped during the week ended September 1 after several weeks when there was little change. Black Knight said its weekly survey found 147,000 fewer borrowers in plans than the previous week, a decline of about 4 percent. The company says last week's decrease means there are about 1 million fewer loans in forbearance than at the peak in May. Seventy-five percent of those remaining are in extensions of their original plan.
A total of 3.784 million loans remain in forbearance, 7.1 percent of the estimated 53 million loans that are currently active. Those loans represent $804 billion in unpaid principal.
The decline was spread across all loan types with the largest improvement, 75,000 loans, in portfolio-held and private label securitized (PLS) loans. That leaves 973,000 or 7.5 percent of those loans, in forbearance. The number of GSE mortgages fell by 49,000 to 1.425 million or 5.1 percent of those portfolios. FHA/VA loans saw a more modest weekly decline of 23,000 to 1.386 million or 11.5 percent.
Black Knight said forbearance starts have, thus far, shown little impact from the reduction in expanded unemployment benefits. Through the first four weeks of August, forbearance starts were down 13 percent from the comparable four-week period in July. September may provide the true test, however, as impacted borrowers were still receiving full expanded unemployment benefits up through July 31.
More than 2M COVID-19-related forbearance plans are set to expire in September, so Black Knight expects to see a significant volume of either extensions or removals or both in late September and early October, similar to what happened in late June and early July when the first term of many plans expired. Over the last thirty days there has been about a 50/50 split in removals and extensions, with 500,000 loans falling into each category.
The company says $4.6 billion in principal and interest payments must be advanced to investors in the forborne loans each month along with $1.7 billion in tax and insurance payments.
SHORT INTEREST MTG DROPS 4.1 MILLION AT AUG 15TH
https://www.wsj.com/market-data/quotes/MTG
Home Price Gains Shrug off Covid Concerns
Mortgage News Daily
Aug 25 2020, 10:04AM
By JANN SWANSON
Both the Federal Housing Finance Agency's (FHFA's) Housing Price Index (HPI) and the several S&P CoreLogic Case-Shiller indices showed price gains across the U.S. in June. Case-Shiller's numbers showed more moderation in the rate of increase than did those from FHFA.
The Case-Shiller's National Home Price Index, covering all nine U.S. census divisions, was up 4.3 percent for the 12 months ended in June, the same annual increase as was posted in May. Prices rose 0.2 percent month-over-month on a seasonally adjusted basis (SA) and were 0.6 percent higher before adjustment (NSA).
The 10-City Composite annual increase came in at 2.8 percent, down from 3.0 percent the previous month while the 20-City Composite gain was 3.5 percent compared to 3.6 percent in May. The 10 and 20-City Composites had NSA increases of 0.1 percent and 0.2 percent, respectively. After seasonal adjusted the 10-City dipped 0.1 percent and the 20-City index was unchanged. In June, 16 of 19 cities (data remains unavailable from Detroit because of COVID-19 related shutdowns) reported increases before seasonal adjustment, while 12 of the 19 cities reported NSA gains.
Phoenix, Seattle, and Tampa still lead the nation in price gains. Phoenix had an annual increase of 9.0 percent followed by Seattle and Tampa, up 6.5 percent and 5.9 percent, respectively. Five of the 19 cities reported higher price increases in the year ending June 2020 versus the year ending May 2020
Existing Home Sales are Booming
MORTGAGE NEWS DAILY
JANN SWANSON
Aug 21 2020, 10:54AM
Existing-home sales posted a second month of significant sales gains in July, building on a record 20.7 percent increase in June. The National Association of Realtors® (NAR) said sales were at a seasonally adjusted 5.86 million units, a 24.7 percent month-over-month increase from 4.72 million and overturning the June record for monthly gains. Sales are now higher than the previous year by 8.7 percent. Each of the four major regions attained double-digit, month-over-month increases, while the Northeast was the only region to show a year-over-year decline.
The record-setting pace was greater than what were some outsized predictions. Analysts polled by Econoday had projected sales to fall in a range of 4.60 to 5.75 million. The consensus was 5.4 million.
"The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days," said Lawrence Yun, NAR's chief economist. "With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021."
Single-family home sales were at a seasonally adjusted annual rate of 5.28 million, a 23.9 percent increase from 4.26 million in June, and up 9.8 percent from one year ago. Existing condominium and co-op sales jumped 31.8 percent to a rate of 580,000 units, essentially the same sales pace as in July 2019.
"Luxury homes in the suburbs are attracting buyers after having lagged the broader market for the past couple of years," Yun said. "Single-family homes are continuing to outperform condominium units, suggesting a preference shift for a larger home, including an extra room for a home office."
The median existing-home price for all housing types in July was $304,100, an annual appreciation of 8.5 percent from the July 2019 median of $280,400, as prices rose in every region. It was the 101st consecutive month of annual gains and the first time ever that the national median has exceeded $300,000. The median existing single-family home price was $307,800, an 8.5 percent annual gain and condo prices grew by 6.4 percent to a median of $270,100.
Inventories continued to tighten. The number of available homes for sale at the end of July was 1.50 million, compared to 1.90 million a year earlier. That inventory is estimated at a 3.1-month supply at the current sales pace, down from 3.9 months in June and 4.2 months in July 2019
FORBEARANCE DECLINE FOR NINTH WEEK IN A ROLL
"Monday, August 17, 2020
MBA Survey:
"Share of Mortgage Loans in Forbearance Decreases for the Ninth Straight Week to 7.21%"
Note: This is as of August 9th.
From the MBA: Share of Mortgage Loans in Forbearance Decreases for the Ninth Straight Week to 7.21%
he Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 23 basis points from 7.44% of servicers’ portfolio volume in the prior week to 7.21% as of August 9, 2020. According to MBA’s estimate, 3.6 million homeowners are in forbearance plans.
...
“More homeowners exited forbearance last week, leading to the ninth straight drop in the share of loans in forbearance. However, the decline in Ginnie Mae loans in forbearance was again because of buyouts of delinquent loans from Ginnie Mae pools, which result in these FHA and VA loans being reported in the portfolio category,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “In a sign that more FHA and VA borrowers are struggling with a very tough job market, more Ginnie Mae borrowers requested than exited forbearance.”
By stage, 38.80% of total loans in forbearance are in the initial forbearance plan stage, while 60.49% are in a forbearance extension. The remaining 0.70% are forbearance re-entries.
MGIC CURES 100% OF NEW NOTICES AS DELINQUENCIES DECLINE BY 1,000 LOANS
MGIC Q2 2020 Earnings Report:
"Third Quarter 2020 Activities
$232.5 billion of Insurance in Force (IIF) at July 31, 2020, compared to $230.5 billion of IIF at June 30, 2020 and $229.3 billion of IIF at May 31, 2020.
8,463 notices of delinquency received in July 2020, compared to 19,358 notices of delinquency received in June 2020 and 31,117 notices of delinquency received in May 2020.
9,452 number of cures reported in July 2020, compared to 6,145 cures reported in June 2020 and 4,876 cures reported in May 2020.
68,206 loans in delinquent inventory at July 31, 2020.
MGIC Investment Corporation declared a $0.06 dividend per common share to shareholders."
FORBEARANCE FALL BELOW 4 MILLION IN LATEST WEEK
"MORTGAGE NEWS DAILY
BY JANN SWANSON
Forbearances Decline for Second Week, Falling Below 4 Million
Aug 14 2020, 9:26AM
Two entities, Black Knight and the Mortgage Bankers Association (MBA) have been tracking loans in forbearance plans since the start of the pandemic. They have diverged a bit in their numbers over the last half year, but both agree, in their most recent reports, that there are now fewer than 4 million borrowers in plans.
MBA, in their report earlier this week, said there were 3.7 million loan in forbearance, or 7.67 percent of all loans in servicer portfolios. On Friday Black Knight's report put the number of 3.9 million, or 7.4 percent of the estimated 54 million loans being serviced. About 73 percent of those loans are in extensions of their initial 90-day plan.
Black Knight says the current tally is down by 71,000 from the previous week and represents $852 billion in unpaid principal. There had been around 4.75 million loans in forbearance plans in mid-May.
About 5.4 percent of all GSE-backed (Fannie Mae and Freddie Mac) loans and 11.5 percent of FHA/VA loans are currently in forbearance plans along with 7.9 percent of loans in private label securities (PLS) or banks' portfolios. All of those investor classes saw their numbers shrink over the past week, the largest change was among portfolio-held/PLS loans which dropped by 36,000 loans or 0.3 percent. GSE loans in forbearance declined by 18,000 (-1 percent) and FHA/VA loans had their second weekly decline - albeit a modest one - falling by 8,000, also -1 percent."
SHORT INTEREST RISES AS MGIC BUYS BACK SHARES
Short Interest increased to 21.72 million or 4.67% as of July 31, 2020. MGIC retired $171 million in convertible note debt since June 30, 2020.
HOME PRICES RISE IN 96% OF MARKETS IN THE US
"Prices increased in 96 percent of the markets in the first quarter of the year as well. However, in those pre-coronavirus days the gain was 7.7 percent year-over-year. In the second quarter, prices were up 4.2 percent to a national median of $291,300."
http://www.mortgagenewsdaily.com/08122020_nar_metro_sales_report.asp
MGIC PURCHASED ANOTHER $38.6 MILLION OF CONVERTIBLE DEBT REDUCING DILUTION
A few weeks back MGIC paid off $133 million of it's 9% Convertible Junior Subordinated Debentures due 2063 (the "2063 Debentures").
Today announced that they bought $38.6 million in convertible debt.
https://mtg.mgic.com/news-releases/news-release-details/mgic-investment-corporation-announces-completion-senior-notes
NEW INSURANCE WRITTEN DOUBLES AS LOAN DEMAND RISES AT MGIC
Mattke added that, "We generated $28.2 billion of new insurance compared to $14.9 billion in the second quarter of 2019. Insurance in force, the long-term driver of our revenues, increased 7.7% from the same period last year.
http://www.mortgagenewsdaily.com/08122020_applications_forbearance.asp
FORBEARANCE DECLINE 8 WEEKS STRAIGHT
to 7.44%
Aug 10, 2020
CONTACT
Adam DeSanctis
adesanctis@mba.org
(202) 557-2727
WASHINGTON, D.C. (August 10, 2020) - The Mortgage Bankers Association's (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 23 basis points from 7.67% of servicers' portfolio volume in the prior week to 7.44% as of August 2, 2020. According to MBA's estimate, 3.7 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the ninth week in a row to 5.19% - a 22-basis-point improvement. Ginnie Mae loans in forbearance decreased by 22 basis points to 10.06%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased by 25 basis points to 10.12%. Independent mortgage bank servicers - at 7.71% - surpassed depository servicers (7.63%) for the highest share of loans in forbearance.
"The share of loans in forbearance declined at a more rapid pace last week, with many borrowers who had been making payments while in forbearance deciding to exit. New forbearance requests increased, but are still well below the level of exits," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "Some of the decline in the share of Ginnie Mae loans in forbearance was due to additional buyouts of delinquent loans from Ginnie Mae pools, which result in these FHA and VA loans being reported in the portfolio category."
MGIC TO PAYOFF PART OF DILUTED SHARES WITH ISSUANCE
https://mtg.mgic.com/news-releases/news-release-details/mgic-investment-corporation-announces-cash-tender-offer-its
MTG BOOK VALUE JUMPS TO $12.95
FROM Q2 2020 EARNING RELEASE:
"Book value per common share outstanding increased by 4.4% from December 31, 2019 to $12.95 and increased by 13.7% from June 30, 2019 (June 30, 2020 book value per common share outstanding includes $0.78 in net unrealized gains on securities)
https://mtg.mgic.com/news-releases/news-release-details/mgic-investment-corporation-reports-second-quarter-2020-results
GOOD NEWS IN THE EVENT OF DEFAULT/FORECLOSURE: HOME PRICES RISING
I DON'T ACTUALLY EXPECT MUCH OF AN INCREASE IN FORECLOSURES/CLAIMS HOWEVER, THE REAL ESTATE MARKET IS HOT AND MEDIATION OF DEFAULTS SHOULD YIELD FEW LOSSES FOR PMI INSURERS...TG
https://www.redfin.com/blog/?p=69696
U.S. Median Home Sale Price up 3% to a New High in June
July 17, 2020 by Tim Ellis
Buyers, powered by record-low mortgage rates and untethered by the pandemic, continue to outnumber sellers, resulting in intense competition and rising prices.
The national median home price rose 2.8% year over year to an all-time high of $311,300 in June, even as new coronavirus cases began to increase again, more than doubling during the month. Home prices typically peak in June each year before trending down slightly through January, but given the pent-up demand that remains following the spring shutdowns, this year has been anything but typical so far, and it’s possible prices may continue to rise further before 2020 is over.
“The coronavirus hasn’t dragged home prices down; in fact we’ve seen just the opposite—prices are rising in spite of the pandemic,” said Brian Walsh, a Redfin agent in Tampa, where the median home price was up 8% year over year in June. “Every house that is the slightest bit cute, fixed-up and priced right gets multiple offers–some up to 10 or 15. The winning offers are almost always all cash with zero contingencies.”
Median prices increased in all but four of the 85 largest metro areas Redfin tracks. The only areas where prices fell were Lake County, IL (-1.9%), New York (-1.9%), Baton Rouge (-1.8%) and Honolulu (-1.2%). Fort Lauderdale (+11.1%), Bridgeport, CT (+11.0%) and Fresno, CA (+10.8%) saw the largest year-over-year increases."
HOMEOWNERS OPT OUT OF FORBEARANCE AS NUMBERS DECLINE
MORTGAGE NEWS DAILY
BY: JANN SWANSON
Forbearance Plan Numbers at Lowest Levels Since May
Jul 17 2020, 5:43AM
There was another decline in forbearance starts this past week and the number of loans in active plans also fell for the third straight week. Black Knight's weekly report on COVID-19 related forbearances reported a total of 4.12 million loans that have been granted forbearance, allowing borrowers to omit or reduce mortgage payments due to financial impacts related to the pandemic. The total is down 27,000 loans compared to the previous week and beings the share of these loans down to 7.77 percent from 7.82 percent of total servicer portfolios. This is the lowest rate since the peak in late May. The loans account for $900 billion in unpaid mortgage balances.
Black Knight notes that the decline in actives forbearances came almost entirely from GSE (Freddie Mac and Fannie Mae) portfolios. Those loans fell by 35,000 from the previous week to 1.643 million. Now only 5.9 percent of the combined GSE portfolios is in forbearance. Another 2,000 loans fell out of the forbearance portion of the private label/portfolio servicing total, leaving a total of 1.065 million or 8.2 percent of those totals. The number of FHA/VA loans in forbearance increased by 10,000 to 1.409 million, a 11,6 percent share.
With the decline in the number of GSE loans in forbearance Black Knight now estimates that Fannie Mae and Freddie Mac have a combined monthly obligation to advance $1.8 billion in principal and interest (P&I) payments to investors and make another $0.7 billion in tax and insurance premium (T&I) payments. The obligation of servicers of FHA and VA loans is an aggregate of $1.36 billion in P&I payments and $0.5 billion in T&I. The two advances from servicers of other loans could be as high as $1.8 billion and $0.6 billion per month, respectively.
MGIC MTG SHORT INTEREST INCHES LOWER TO 18.8MM FROM 19.45MM
Over the last month mtg short interest has declined from 21MM in June 15,2020, a month ago to 18.8 million as of July 15th.
However, shoer interest has yet to decline back to 15.MM in May 31, 2020.
Apparently, when MTG went to $10.60 in early June, investors applied 6 million in short interest to bring the price down, of course with the intent to repurchase at lower price s....
Mortgage Application Volume is Up, Forbearances Continue to Wane
MORTGAGE NEWS DAILY
BY: JANN SWANSON
Jul 15 2020, 7:55AM
The Mortgage application volume increased last week, bouncing back slightly from the prior holiday shortened period. Bankers Association (MBA) said its Market Composite Index, a measure of volume, gained 5.1 percent on a seasonally adjusted basis during the week ended July 10 and was 16 percent higher before adjustment. The volume during the week ended July 3 was adjusted to account for the Independence Day holiday.
The Refinance Index increased 12 percent from the previous week and was 107 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 64.2 percent of total applications from 60.1 percent the previous week. The seasonally adjusted Purchase Index declined by 6 percent but was 5 percent higher unadjusted than during the prior week and 16 percent higher than the same week in 2019.
CLAIMS DECLINE IN Q2 2020 TO 661 FROM 897 SEQUENTIALLY
MGIC CLAIMS DECLINED IN Q2 2020 AND CONTINUED THE DECLINING TREND OVER THE LAST SEVERAL YEARS..
PROFIT SHOULD MIRROR Q1 IN Q2 2020, AT $.42 CENTS A SHARE.
CLAIMS WILL PROBABLY INCREASE IN H2 DUE COVID-9 HOWEVER, TO WHAT EXTENT IS UNKNOWN DUE THE SIGNIFICANT FORBEARANCE PROGRAMS.
IN ADDITION,THE PMI MARKET IS OPERATING AGAINST THE BACKDROP OF THE BEST REAL ESTATE MARKET IN DECADES.
TO establish reserves for the covid delinquency, MGIC will probably suspend dividends to the holdingCo and shareholders.
NO SIGNIFICANT INCREASE IN MGIC
CLAIMS
MGIC reported just 208 claims in June down from 300 in May 2020
Delinquency increased but, 80% have been given forbearance to Skip payment due on covid-9.
Presser
https://mtg.mgic.com/news-releases/news-release-details/mgic-investment-corporation-schedules-2nd-quarter-2020-earnings
Homebuyer mortgage demand spikes 33% as rates set another record low
PUBLISHED WED, JUL 8 20207:00 AM EDTUPDATED 2 HOURS AGO
Diana Olick
@IN/DIANAOLICK
@DIANAOLICKCNBC
@DIANAOLICK
KEY POINTS
Mortgage applications to purchase a home rose 5% for the week and were a remarkable 33% higher than a year ago.
Home prices gains continue to accelerate, so low mortgage rates are giving buyers much-needed help.
WATCH NOW
VIDEO01:20
Homebuyers rush back into the market as mortgage rates hit new low
After a brief pullback at the end of June, homebuyers rushed back into the mortgage market last week, taking advantage of record-low mortgage rates.
Mortgage applications to purchase a home rose 5% for the week and were a remarkable 33% higher than a year ago, according to the Mortgage Bankers Association’s index, which was seasonally adjusted, including for the Fourth of July holiday.
Buyer demand has been incredibly strong since mid-May, after the coronavirus shut down most housing activity in April. The only thing standing in the way of more sales is the record low supply of homes for sale.
Home prices gains continue to accelerate, so low mortgage rates are giving buyers much-needed help. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $510,400 dropped to 3.26% from 3.29%. Points, including the origination fee, for loans with a 20% down payment decreased to 0.35 from 0.36.
“Mortgage rates declined to another record low as renewed fears of a coronavirus resurgence offset the impacts from a week of mostly positive economic data, such as June factory orders and payroll employment,” said Joel Kan, an MBA economist. “The average purchase loan size increased to $365,700 — also another high — as borrowers contend with limited supply and higher home prices.”
RECORD LOW RATES, STEADY HOME PRICES SIGNAL BULL CASE FOR PMIs
CoreLogic: House Prices up 4.8% Year-over-year in May
"Tuesday, July 07, 2020
Notes: This CoreLogic House Price Index report is for May. The recent Case-Shiller index release was for April. The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA).
From CoreLogic: Prepare for a Cooldown: CoreLogic Reports Home Prices Were Up in May, but Could Slump Over the Summer
Nationally, home prices increased by 4.8%, compared with May 2019. Home prices increased 0.7% in May 2020 compared with April of this year.
Strong home purchase demand in the first quarter of 2020, coupled with tightening supply, has helped prop up home prices through the coronavirus (COVID-19) crisis. However, the anticipated impacts of the recession are beginning to appear across the housing market. Despite new contract signings rising year over year in May, home price growth is expected to stall in June and remain that way throughout the summer. CoreLogic HPI Forecast predicts a month-over-month price decrease of 0.1% in June and a year-over-year decline of 6.6% by May 2021.
Unlike the Great Recession, the current economic downturn is not driven by the housing market, which continues to post gains in many parts of the country. While activity up until now suggests the housing market will eventually bounce back, the forecasted decline in home prices will largely be due to elevated unemployment rates. This prediction is exacerbated by the recent spike in COVID-19 cases across the country."
ARE INVESTORS SHORTING MGIC INVESTMENT?
MarketBeat:
Short interest rose 25% from May 31, 2020 from 15 million to 21 million.
Meanwhile, ever sharp rise in the market, Drives UP MTG.
MGIC Investment saw a drop in short ointerest in June. As of June 30th, there was short interest totaling 19,450,000 shares, a drop of 7.9% from the June 15th total of 21,110,000 shares. Based on an average daily trading volume, of 7,450,000 shares, the days-to-cover ratio is presently 2.6 days. Currently, 5.9% of the company's shares are sold short. View MGIC Investment's Current Options Chain.
FORBEARANCE DROP MOST SINCE THEY STARTED DECLINING 104,000
MORTGAGE NEWS DAILY
BY: JANN SWANSON
Forbearance Plans Resume Downtrend After Last Week's Uptick
Jul 3 2020, 9:33AM
The number of homeowners in COVID-19 forbearance dropped sharply this week, to the lowest level since the first week of May. The number of plans which hit a peak on May 22 then declined slowly over the next three weeks but shot up by nearly 80,000 loan plans during the week ended June 23. Black Knight's survey of mortgage loan servicers found a resumption of the downward trend this week, with plans falling by 104,000, the largest decline so far.
HOME PRICES UP=HIGH DEMAND LOW SUPPLY
BY: JANN SWANSON
Home Prices "Remarkably Stable" in April
MORTGAGE NEWS DAILY
Jun 30 2020, 9:51AM
Home prices continued to hold up on a national basis in April. The S&P CoreLogic Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, reported a 4.7 percent annual gain in April, up from 4.6 percent in March. The National Index posted a 1.1 percent month-over-month increase before seasonal adjustment and an 0.5 percent gain after it.
The 10-City Composite appreciated at an annual rate of 3.4 percent, unchanged from the March rate while the 20-City Composite's annual increase rose to 4.0 percent from 3.9 percent the previous month. The 10-City and 20-City measures had monthly increases of 0.7 percent and 0.9 percent respectively before seasonal adjustment and both posted 0.3 percent increases after adjustment.
In April, all 19 cities (excluding Detroit for which sufficient data was not available due to a county recording office shutdown) reported increases before seasonal adjustment. Sixteen of the 19 cities reported them afterward.
Phoenix, Seattle, and Minneapolis had the highest year-over-year appreciation among the 19 cities reporting with annual increases of 8.8 percent, 7.3 percent increase and 6.4 percent, respectively. Twelve of the 19 cities reported higher price increases in the year ending April 2020 versus the year ending March 2020. Cleveland, which has long lagged all other cities on the index, posted a 6 percent increase in April.
PENDING HOMES SALES SMASH RECORD, SUPPLY OF HOMES LOW
http://www.mortgagenewsdaily.com/video/archive/2020/6/29.aspx#948261
"JANN SWANSON
Mortgage News Daily
Record Surge in Pending Home Sales
Jun 29 2020, 10:11AM
Lawrence Yun, chief economist for the National Association of Realtors® (NAR), predicted last month that April's home sales contract activity "will be the lowest point for pending sales." That turns out to have been a huge understatement--at least for now.
This morning's release of NAR's Pending Home Sales Index (PHSI) showed the number of those contracts for purchasing existing single-family houses, condos, townhomes, and cooperative apartments did indeed explode in May, soaring by 44.3 percent to 99.6. It was the greatest single month increase since NAR started tracking pending sales in 2001. Every major region recorded an increase in month-over-month activity, while the South also had a year-over-year increase in pending transactions."
AVERAGE HOMEOWNER EQUITY IS MUCH BETTER THAN 2008
"More Americans are house rich, but they're leaving that cash in the house" CNBC
"The Average U.S. Homeowner Gained $7,300 of Equity in 2019"
Residential News » Irvine Edition | By WPJ Staff | March 12, 2020 8:09 AM ET
home-equity-report-frank-martell-frank-nothaft-11857.php
https://www.worldpropertyjournal.com/real-estate-news/united-states/irvine/real-estate-news-home-positive-equity-data-corelogic-2019-home-equity-report-frank-martell-frank-nothaft-11857.php