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Housing market recovery remarkable: Ivy Zelman
CNBC's "Halftime Report" team is joined by Ivy Zelman, CEO of Zelman and Associates, to break down how she views the housing market amid the coronavirus pandemic.
http://www.mortgagenewsdaily.com/video/archive/2020/6/24.aspx#947939
MGIC REPURCHASED 9.6MM SHARES AT $12.46, NOW $8.52
MOSTLY LIKELY, no big shareholder would sell a few million to them now. However, they could take advantage of open market prices and buy a few million to cost average down on their repurchase program.
Im sure they wouldn't have bought at $12.46 per share if, they would have known, that they could have bought at today's prices.
They could have bought 4.4 million more shares at today's price.
Well endowed investors are salivating at prospects of getting a homeowners house due the coronavirsus pandemic but, so far foreclosures continue to hit record lows. So, although, we may see a tick higher in reserves due to delinquencies increasing, it may not result in substantially higher claims activity.
No material increase in claims, no outflow of cash. Thus, MGIC INVESTMENT maintains it capital base. Although, it's prudent to establish a reserve for a delinquency, the probability of it resulting in an out of pocket expense is a component of the calculation of the reserve.
DELINQUENCIES STABILIZE: BLACK KNIGHT
GOOD NEWS: FORECLOSURE CONTINUE LOWER
JANN SWANSON
MORTGAGE NEWS DAILY
JUN 22, 2020
"To this point, late stage delinquencies have continued to slide. The foreclosure inventory, loans that are in process of foreclosure, numbers 200,000, 11,000 fewer than in April and down 55,000 year-over-year and foreclosure starts, at 5,100 were down 31.1 percent and 86.4 percent from the two earlier periods. The foreclosure inventory rate is 22.7 percent below its May 2019 level. The foreclosure rate was 0.9 percent, a number based on loans 90 or more days past due. This is a 19.6 percent decline from April and down 95.1 percent on an annual basis. CARES, in addition to requiring servicers to offer forbearance plans, also puts a moratorium on most foreclosure activity."
"The number of non-current loans, including those in foreclosure, at the end of May was 4.32 million. However, Black Knight says that a higher share of June payments had been made at the point their report was written than May payments at the same point that month. This suggests that the rise in delinquencies may be leveling off. Still, the share of homeowners in forbearance who continue to make mortgage payments is declining. Forty-six percent of forborne borrowers made their April payments; 26 percent paid in May, but as of June 15, the rate was only 15 percent."
PMI COMPANIES CONDITIONS IMPROVE AS MARKET SHARE RISES AND FORBEARANCE LOWER
PROFIT POTENTIAL RISES FOR Q2 2020 AND H2 2020 AS THE STARS ALIGN
MGIC is under estimated, along with other PMI'S.
BY: JANN SWANSON
MORTGAGE NEWS DAILY
"Forbearance Numbers Continue to Retreat
Jun 19 2020, 9:32AM
*The number of homeowners in active forbearance plans fell again this past week. Black Knight estimates there are now 4.6 million people remaining in the plans which mortgage servicers are required to provide as part of the CARES Act package of COVID-19 economic relief. Those plans allow homeowners who claim a financial impact from the pandemic to temporarily skip or make partial mortgage payments.
The June 16 count represents 8.7 percent of all active mortgages, down by 57,000 and 0.1 percentage point from the previous week. It is 158,000 fewer plans than at the peak during the week of May 22.
The current plans represent just over $1 trillion in unpaid principal ($1,012 billion). Some 6.8 percent of all GSE-backed loans and 12.1 percent of all FHA/VA loans are currently in plans.
While the number of government-backed loans in plans are declining, GSE loans fell by 51,000 and VA/FHA loans by 11,000, those serviced for others continue to grow. There was an increase of 6,000 last week in portfolios serviced for portfolio lenders, private label securities, and other non-agency investors."
PRIVATE MORTGAGE INSURES CONTINUE TAKING MARKET SHARE FROM FHA
"Conventional Loans Stealing Market Share
JANN SWANSON
MORTGAGE NEWS DAILY
Jun 18 2020, 11:01AM
The dominance of conventional lending continued to grow in May. Ellie Mae's Origination Insight Report says those loans made up 82 percent of originations during the month, up from 81 percent in April and 70 percent at the end of 2019. The FHA share has shrunk from 17 percent to 9 percent over that period and VA loans had a 6 percent share, down from 9 percent.
The company's reports that the interest rate on all loans closed in May averaged 3.43 percent, down from 3.48 percent in April. The conventional 30-year rate averaged 3.44 percent, down 4 basis points, and the FHA and VA rates dropped 9 basis points and 7 basis points to 3.45 percent and 3.24 percent, respectively. As rates dropped, the percentage of refinances held steady at 65 percent of closed loans in May. The VA share of purchase loans, however, jumped from 69 to 75 percent.
"Interest rates continued to decline in May, but we are seeing signs of refinances leveling out as the percentage of closed refinances held at 65 percent for the second month," said Jonathan Corr, President and CEO of Ellie Mae. "As we enter the summer months that typically bring a busier purchase market, we will watch to see if the numbers shift further as homebuyers continue to take advantage of low rates and a loosening of inventory after a tight March and April driven by the shelter in place."
The time to close all loans increased to 45 days in May, up from 42 days in April. Refinancing accounted for most of the extra time. The closing period for those loans grew from 39 days in April to 44 days."
Q1 2020 RISK-TO-CAPITAL RATIOS PMI COs MGIC #1
#1 MGIC 10.2 TO 1
#2 ESNT 11.7 TO 1
Essent Guaranty issued a secondary and raise capital
#3 RADIAN 12.4 TO 1
#4 NMIH 17.2 TO 1
NMI HOLDINGS issued a secondary offering and made a bond offering and has raised more capital
All of the pure play PMI COs are well under 25 to 1, the nationally accepted guideline of risk to capital ratio.
MGIC #1 MARKET SHARE LEADER IN Q1 2020 IN NIW
Pure Play PMI COMPANIES
MGIC #1 $17.9 BILLION
RADIAN #2 $16.7 BILLION
ESNT #3 #13.5 Billion
NMI HOLDINGS #4 $11.1 BILLION
MGIC REMAINED #1 IN CAPITAL ADEQUACY.
MGIC CAPITAL ADEQUATE TO FINANCE GROWTH, NMIH AND ESNT ISSUE STOCK
As mentioned manytimes here, Essent and National mortgage Insurance Company capital adequacy could not stand a shock.
In late May and early June both isuued secondary issuances, diluting their stock. While MGIC has been repurchasing shàres.
PMI BUSINESS IS BOOMING AS PURCHASE APPS HIT 11 YEAR HIGH
New Insurance Written in Q1 2020 was impressive for MGIC
"New insurance written of $17.9 billion, compared to $10.1 billion in the first quarter of 2019.
Insurance in force of $225.5 billion at March 31, 2020 increased by 1% during the quarter and 7% compared to March 31, 2019."
but, look at what's happening in the PMI MARKET NOW:
BY: JANN SWANSON
MORTG AGE NEWS DAILY
Purchase Applications Hit 11yr High, Refi Boom Continues
Jun 17 2020, 5:48AM
Mortgage Application volumes continued to grow during the week ended June 12 as mortgage rates reached new lows and states allowed more businesses to reopen. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, increased 8.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index was up 7 percent compared with the previous week.
The volume of refinancing applications moved higher for the second straight week. That index increased 10 percent compared to the week ended June 5 and was 106 percent higher than the same week one year ago. Refinancing accounted for 63.2 percent of application activity, up from 61.3 percent the prior week.
The seasonally adjusted Purchase Index rose for the ninth time, a gain of 4 percent. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 21 percent higher than the same week one year ago.
"Purchase applications increased to the highest level in over 11 years and for the ninth consecutive week. The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a gradual improvement in consumer confidence," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Mortgage rates dropped to another record low in MBA's survey, leading to a 10 percent surge in refinance applications. Refinancing continues to support households' finances, as homeowners who refinance are able to gain savings on their monthly mortgage payments in a still-uncertain period of the economic recovery."
The FHA share of total applications decreased to 11.0 percent from 11.5 percent and the VA share
SHOULD MGIC MGMT REPURCHASE MTG AT $8.99/SHARE?
In Q1 2020 they repurchased shares as follows from Q1 FINANCIAL RESULTS:
"9.6 million shares of common stock were repurchased at an average cost per share of $12.47"
I haven't been able to determine their repurchase procedures but, the timing is everything...
As of Q1 the book value was $12.53/share, which made $12.47 a good buying strategy/execution for management.
FED CHRM POWELL SAYS STRESS FROM FORBEARANCE APPEARS OVER
FEDERAL RESERVE BANK CHAIRMAN, JEROME POWELL, testifying before the U.S. SENATE this morning, said the stress from forbearance peaked a couple of months ago.
FORBEARANCE VIDEO UPDATE CNBC: DIANA OLICK
http://www.mortgagenewsdaily.com/video/archive/2020/6/12.aspx#947015
FORBEARANCE ON DELINQUENT MORTGAGES DECLINE AGAIN AS HOMEOWNERS REGAIN CONTROL OF FINANCES
MORTGAGE NEWS DAILY
BY: JANN SWANSON
"Forbearances Drift Lower for Second Week in a Row
Jun 12 2020, 11:00AM
The number of homeowners with mortgages in forbearance has fallen for the second consecutive week. Black Knight reports that, as of June 9, there were 4.66 million active COVID-19 related forbearance plans. This is 77,000 fewer than the previous week and down by 112,000 homeowners at the May 22 peak. The current number represents $1,03 billion in unpaid principal balances.
Servicers now have 8.8 percent of their total portfolios in plans, down from 8.9 percent the previous week. This breaks down to 7.0 percent of all Fannie Mae and Freddie Mac (GSE) guaranteed mortgages and 12.2 percent of FHA/VA loans.
Loans serviced for the GSEs saw the greatest reduction, with plans declining by 47,000 week-over-week to 1.95 million loans with an unpaid balance of $411 billion. The number of FHA/VA loans fell from 1,491 million to 1.478 million. After rising last week, the number of plans among those loans serviced for others (portfolio loans, private label securities) also declined, from 1,247 million to 1.232 million, 9.5 percent of those portfolios.
Black Knight estimates that, at today's level, mortgage servicers need to advance a combined $3. 5 billion per month in principal and interest (P&I) payments on COVID-19-related forbearances to holders of government-backed mortgage securities. That's on top of the $1.5 billion in taxes and insurance payments they must make on behalf of borrowers. Servicers of other loans may be obligated for $2.1 billion in advanced P&I and $0.7 billion in T&I payments each month. While P&I payments on behalf of GSE backed loans have been capped at four months, their servicers still face up to $8.8 billion in advances over that four-month period."
MTG DOWN FROM RECENT HIGH OF $10.57 A "GOOD BUY"
It depends on whether it is a continuing victim of market volatility.
Current
Book value $12.57
PE RATIO 4.56
MGIC HAS HIGH CAPITAL TO OFFSET PMI COs RESERVES REQUIREMENTS
See capital efficiency before COVID-19:
"CAPITAL RATIOS PMI COMPANIES Q3 2019
9.9 to 1 MGIC
12.9: to 1 RADIAN
13.4 to 1 ESSENTIAL GUARANTY
15.8 to 1 MIN HOLDINGS
MGIC has an A- credit rating.
BLACK KNIGHT REVIEW'S HISTORIC DELINQUENCY SPIKE
MORTGAGE NEWS DAILY
BY: JANN SWANSON
Black Knight Takes a Close Look at April's Historic Delinquency Rate
Jun 7 2020, 4:25PM
Black Knight says that only three months after the national delinquency rate hit a record low, falling 1.5 percentage point below its pre-Great Recession average in January, it skyrocketed to 6.45 percent. This is a 3.1 percent change in April alone, the largest single-month increase on record and nearly triple the previous record, a November 2008 surge. During the Great Recession it took two years for the delinquency rate to increase this much and the company says it could climb still higher when the May numbers come in."
ALL PMI COs'. RESERVES SET TO TAKE A HIT IN Q2 20' OVER HIGHER DELINQUENCIES FROM COVID-19 PANDEMIC
"Black Knight's First Look: Past-Due Mortgages Increase by 1.6 Million in April, Largest Single-Month Increase Ever Recorded; Delinquency Rate Nearly Doubles
- 3.6 million homeowners were past due on their mortgages as of the end of April, the largest number since January 2015
- The number includes both homeowners past due on mortgage payments who are not in forbearance, as well as those in forbearance plans who did not make an April mortgage payment
- At 6.45%, the national delinquency rate nearly doubled (+3.06%) from March, the largest single-month increase ever recorded, and nearly three times the previous single-month record set back in late 2008
- Delinquency increases in Nevada (+5.2%), New Jersey (+5.1%), and New York (+4.9%) led the states, while Miami (+7.2%), Las Vegas (+6.2%) and New York City (+5.4%) topped the 100 largest metro areas
- There were declines in cure activity among later-stage delinquencies as well, with the number of seriously delinquent mortgages (90+ days) increasing by 56,000 (+14%) from March
- Both foreclosure starts and foreclosure sales hit record lows in April as moratoriums halted foreclosure activity across the country"
Congress Reaches $2 Trillion Aid Deal
People fleeing New York to other parts of the country were told to quarantine themselves for 14 days. President Trump said he wanted the U.S. “opened up” by Easter. The number of deaths in Spain — more than 3,400 — surpassed the toll in China.
RIGHT NOWPrince Charles, the heir to the British throne, has the coronavirus, the royal family said in a statement.
??????????
Here’s what you need to know:
The $2 trillion relief package is the biggest in American history.
Trump wants U.S. “opened up” by Easter as New York infections soar and Spain’s crisis deepens.
Prince Charles tests positive for the coronavirus.
Stocks are unsteady as relief over U.S. stimulus fades.
In India, Day 1 of lockdown for a fifth of humanity.
Outbreaks emerge across the U.S., but states’ responses vary.
Spanish morgues run out of room for the dead as the nation pleads for time.
HOUSING MARKET STRONG IN FEBRUARY
http://www.mortgagenewsdaily.com/video/archive/2020/3/24.aspx#939716
REFINANCE APPLICATIONS UP 79 PERCENT
THE MORTGAGE INTEREST RATES WILL STAY LOW AS HUGE AMOUNTS OF CASH FROM STOCK MARKET ARE DRIVING RATES LOWER.
Mortgage application pipelines are clogged as mortgage finance companies and banks, scramble to find (loan processors) employees. TG54
The Refinance Index increased 79 percent from the previous week to the highest level since April 2009, and was 479 percent higher than the same week one year ago
Mortgage Applications Increase in Latest MBA Weekly Survey; MBA Doubles 2020 Refinance Originations Forecast
•"The Refinance Index increased 79 percent from the previous week to the highest level since April 2009, and was 479 percent higher than the same week one year ago."
Mar 11, 2020
CONTACT
Adam DeSanctis
adesanctis@mba.org
(202) 557-2727
WASHINGTON, D.C. (March 11, 2020) - Mortgage applications increased 55.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending March 6, 2020.
In response to the current interest rate environment, MBA now forecasts total mortgage originations to come in around $2.61 trillion this year - a 20.3 percent gain from 2019's volume ($2.17 trillion). Refinance originations are expected to double earlier MBA projections, jumping 36.7 percent to around $1.23 trillion. Purchase originations are now forecasted to rise 8.3 percent to $1.38 trillion.
The Market Composite Index, a measure of mortgage loan application volume, increased 55.4 percent on a seasonally adjusted basis from one week earlier to the highest level since April 2009. On an unadjusted basis, the Index increased 54 percent compared with the previous week. The Refinance Index increased 79 percent from the previous week to the highest level since April 2009, and was 479 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 6 percent from one week earlier. The unadjusted Purchase Index increased 7 percent compared with the previous week and was 12 percent higher than the same week one year ago.
BEST OPPORTUNITY FOR $411MM SHARE REPURCHASE PROGRAM IMAGINED $5.35/share
Quantitatively, 76.8 million shares approximately. That would be a 22 percent reduction in outstanding in stock and correspondent increase in profit.
STATES STARTING TO SUSPEND MORTGAGE PAYMENTS - CORONAVIRUS
Many have wondering how CORONAVIRUS might affect Private Mortgage Insurers well, state and federal proposals being made to suspend mortgage payments during CORONAVIRUS crisis:
https://dfi.wa.gov/coronavirus-financial-resources
Such plans should prevent claims to PMIs.
https://www.google.com/amp/s/www.forbes.com/sites/brendarichardson/2020/03/13/mortgage-relief-options-are-available-to-homeowners-affected-by-coronavirus-safety-measures/amp/
Uplifting Story Of CORONAVIRUS
ACCUMULATION/DISTRIBUTION UP/DOWN OFF BOTOM
WHAT NEXT?
THIS MAY BE PART OF THE MOVE HIGHER MTG
Especially after, the REDICULOUSLY low price of MGIC STOCK, MTG.
WUHAN, CHINA SHUTS 16 TEMPORARY HOSPITALS AS CORONAVIRUS PATIENTS IMPROVES
NY POST
March 11, 2020
"
China shuts all 16 temporary coronavirus hospitals in Wuhan, Genesis of the CORONAVIRUS.
In a dramatic sign that the coronavirus crisis is improving in China, the last two of 16 temporary hospitals in the epicenter city of Wuhan have been shut down, according to a report.
The final group of 49 patients walked out of the Wuchang temporary hospital in the capital of Hubei province on Tuesday afternoon to cheers, according to the Xinhua news agency.
The 784-bed facility — which was converted from Wuchang Hongshan Stadium — opened Feb. 5 and received a total of 1,124 patients, according to the news outlet, which said 833 were discharged and 291 were transferred to other hospitals.
Meanwhile, a makeshift hospital in Wuhan’s Jiangxia District also was shuttered Thursday after 26 days of operation, Xinhua reported. It had received a total of 564 patients, 392 of whom were discharged after recovering.""
PREPARE FOR A BOUNCE HIGHER IN MARKET
FUNDAMENTALS ARE NOT JUSTIFYING CURRENT PRICE. MTG IS NEARLY $3 BELOW TANGIBLE BOOK VALUE.
TRUMP UPBEAT ABOUT CURES FOR CORONA VIRUS
NEW YORK TIMES
MARCH 11, 2020
TRUMP SAYS MARKET WILL BE FINE AS CORONAVIRUS IS RESOLVED
Over the past several weeks, each time Donald Trump has “addressed the nation” on the matter of the deadly coronavirus, the result has been that “the nation” has been left significantly more terrified than it was before he opened his mouth. That likely has to do with the fact that the content of the president’s remarks have somehow made it clear that he is even more incompetent than previously thought and that telling people things like “Mike ‘HIV outbreak’ Pence is now in charge of the government’s virus response” is not actually comforting at all. So when Trump tweeted yesterday that he would be once again addressing the country, this time from the Oval Office, the odds were baked in that, at best, he probably wasn’t going to say anything very heartening or announce any measures that would give the impression he finally had this thing under control. And in reality, the whole thing was so much worse than anyone could have imagined! How much worse? Markets-almost-immediately-imploding-in-response worse
Human trials for a coronavirus vaccine could begin ‘within a few weeks,’ top US health official says
PUBLISHED THU, MAR 12 202012:29 PM EDTUPDATED 11 MIN AGO
Berkeley Lovelace Jr.
@BERKELEYJR
Noah Higgins-Dunn
@HIGGINSDUNN
KEY POINTS
Human trials testing a potential vaccine to prevent COVID-19 could begin “within a few weeks” with a vaccine ready for public use within the next 12 to 18 months, a top U.S. health official said.
“I would hope within a few weeks we may be able to make an announcement to you all that we’ve given the first shot to the first person,” Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said.
GP: Coronavirus China lab testing 200212
Laboratory technicians work on testing samples from people to be tested for the COVID-19 coronavirus at a laboratory in Shenyang in China’s northeastern Liaoning province on February 12, 2020.
Human trials for a potential vaccine to prevent COVID-19 could begin “within a few weeks” with a vaccine ready for public use within the next 12 to 18 months, a top U.S. health official said Thursday.
“We said ... that it would tak
$411 MILLION REPURCHASE PROGRAMM = 37.5 MILLION SHARES
AT $11.50/SHARES MTG, MGIC CAN BUY 37.5 MILLION SHARES REPURCHASED.
MTG is currently trading at $10.65/share, book value is $12.42/share. An all-time bargain price.
MORTGAGE APPLICATIONS INCREASE AS MBA REVISES 2020 FORECAST HIGHER
"WASHINGTON, D.C. (March 11, 2020) - Mortgage applications increased 55.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending March 6, 2020.
In response to the current interest rate environment, MBA now forecasts total mortgage originations to come in around $2.61 trillion this year - a 20.3 percent gain from 2019's volume ($2.17 trillion). Refinance originations are expected to double earlier MBA projections, jumping 36.7 percent to around $1.23 trillion. Purchase originations are now forecasted to rise 8.3 percent to $1.38 trillion.
The Market Composite Index, a measure of mortgage loan application volume, increased 55.4 percent on a seasonally adjusted basis from one week earlier.'
BOTH PURCHASE AND REFINANCE APPS INCREASED WEEKLY Y/O/Y - MBA
UNADJUSTED INCREASE
PURCHASE APPLICATIONS 10%
REFINANCE APPLICATIONS 15.1%
10 year low interest rates is driving the affordability index higher so, first time buyers are entering the real estate market.
Latest MBA Weekly Survey
Mar 4, 2020
CONTACT
Adam DeSanctis
adesanctis@mba.org
(202) 557-2727
WASHINGTON, D.C. (March 4, 2020) - Mortgage applications increased 15.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending February 28, 2020. The results for the week ending February 21, 2020, included an adjustment for the Presidents' Day holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 15.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 29 percent compared with the previous week. The Refinance Index increased 26 percent from the previous week and was 224 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index increased 11 percent compared with the previous week and was 10 percent higher than the same week one year ago.
Black Knight's First Look: National Mortgage Delinquency Rate Decreased in January,
February 20, 2020
Next up February results
Lowest Level on Record
From Black Knight: Black Knight’s First Look: Mortgage Delinquencies Fall to Lowest Level on Record; January Sees Strongest Decline in More Than a Year
• Mortgage delinquencies fell by more than 5% in January, hitting their lowest level on record dating back to 2000
• January’s 14% year-over-year decline is the strongest in more than 12 months, with the rate of improvement picking up noticeably in recent months
• There are now fewer than 2 million homeowners past due on their mortgages or in active foreclosure, the fewest since March 2005
• Despite the decline in delinquencies, foreclosure starts edged upward in January, but remain nearly 15% below last year’s levels
• The number of loans in active foreclosure remained relatively flat for the month (+1,000 properties in foreclosure), and down 19,000 from the same time last year, leaving the national foreclosure rate unchanged
• Though falling by 15% in January, prepayment activity remains 113% above last year’s levels
According to Black Knight's First Look report for January, the percent of loans delinquent decreased in January compared to December, and decreased 14.2% year-over-year.
The percent of loans in the foreclosure process increased slightly in January, and were down 9.2% over the last year.
Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 3.22% in December, down from 3.40% in December.
The percent of loans in the foreclosure process was unchanged at 0.46% from 0.46% in December.
Opportunity prices
Well see what MGIC MANAGEMENT has to say if, they don't repurchase shares now!
S&P PRICE/BOOK 3.22, MTG P/B 1.0
MTG IS 3 TIMES MORE VALUABLE THAN AVERAGE S&P 500 SHARE.
In addition, the equity consists of cash reserves portfolio against insurance policies
MTG BOOK VALUE IS $12.42 AS OF Q4 2019
MTG Current price/book is 1.01
NMIH price/book is 1.79
Book value is $13.61
IS MGIC MGMT BEING OPPORTUNISTIC IN SHARE REPURCHASE PROGRAM?
Well who would have known that MTG would drop by over $3 in two weeks after a new share repurchase program was announced?
I just hope MGIC MANAGEMENT IS BEING OPPORTUNISTIC IN SNAPPING UP SHARES.
THIS A PREVIOUS POST:
tommiegun55 Thursday, 02/13/20 03:21:41 PM
Re: None 0
Post #
1020
of 1028
MGIC MGMT ANNOUNCED AN EMPTY PROMISE OF $300MM SHARE REPURCHASE PROGRAM
Currently, CEO TIM MATTKE, has the authority to to repurchase $411 million in MGIC INVESTMENT STOCK.
On the surface shareholders could expect an increase in their stock holdings of approximately 7.5% depending on the purchase price, repurchase time period, etc.
But, not so fast, using MGIC MGMT CURRENT STRATEGY MOST LIKE THEY WILL WAIT FOR SOMETHING BAD TO HAPPEN, THAT WILL LOWER THE STOCK PRICE.
ESSENCE IN ORDER FOR SHAREHOLDERS TO BENEFIT FROM THE SHARE REPURCHASE ANNOUNCEMENT, YOU WILL MOST LIKELY LOSE VALUE IN YOUR PORTFOLIO FIRST, THEN YOU MUST REMAIN HOPEFUL THROUGH A DECLINE IN MTG, THEN YOU MUST WAIT FOR THE MTG TO RECOVER THEN APPRECIATE TO ORIGINAL VALUE, THEN WAIT FOR THE STOCK PRICE TO EXCEED THE INITIAL PRICE AT THE TIME OF THE SO CALLED STOCK REPURCHASE PROGRAM.
IN ORDER TO REWARD YOU FOR WAITING THROUGH THAT DELITERIOUS TIME PERIOD, MGMT DEVISED A DIVIDEND. SEEMS COMPLICATED RIGHT? IT IS ..
THIS IS A RECAP OF SHARE REPURCHASE ACTIVITY THAT INCLUDED IN Q4 FINANCIAL RESULTS RELEASE:
"In 2019 and 2018, we repurchased approximately 8.7 million and 16.0 million shares of our common stock, respectively, using approximately $114 million and $175 million of holding company resources, respectively. We may repurchase up to an additional $111 million of our common stock through the end of 2020 under a share repurchase program approved by our Board of Directors in 2019. In addition, in January 2020, our Board of Directors approved the repurchase of up to an additional $300 million of our common stock through the end of 2021. Repurchases may be made from time to time on the open market or through privately negotiated transactions. The repurchase program may be suspended for periods or discontinued at any time."
INVESTORS OVERBUILDING COULD HAVE NEGATIVE IMPACT ON OVERALL MARKET
While overall market is strong over investment could negativity impact market. Owner occupied is still strong.
BUY ESNT AND NMIH ON REFINANCE BOOM
THE STARTUPS COULD SEE SIGNIFICANT INCREASES IN THEIR INSURANCE IN FORCE, WHILE THE LEGACY COMPANIES PERSISTENCE RATES FALL.
MORTGAGE NEWS DAILY
Full Steam Ahead for Refi Boom as Rates Hit New Lows
Mortgage Rates Back Near Multi-Year Lows
Home Sales Crushed Expectations
New Home Sales Hit Highest Levels Since 2007
BY: MATTHEW GRAHAM
Mortgage Rates Are Low, But They're Not Falling as Fast as The 10yr
Feb 25 2020, 4:56PM
Mortgage rates have been putting on a rather frustrating and exciting show in the month of February. On the one hand, they're at their lowest levels since 2012 and are off to their strongest start of any year on record. On the other hand, they're not nearly as low as you'd expect them to be based on movement elsewhere in the interest rate world. In fact, even on a day like today where the mighty 10yr Treasury yield (something that a lot of people mistakenly view as the basis for mortgage rates) precipitously fell to new all-time lows, many mortgage lenders were offering the same rates as yesterday. More than a few were offering HIGHER rates. What's up with that?!
It's certainly true that the 10yr yield sets the tone for mortgage rates better than any other mainstream rate. Treasuries set the tone for all manner of rates in the US, in fact. They serve as the most basic expression of borrowing money in America. After all, Treasuries are simply loans taken out by the US government. Lend to anyone else beyond Uncle Sam and you'll be compensated with slightly higher interest and a slightly different set of risks (Treasuries are considered "risk-free," and I'd agree with that for all practical purposes. Point being, sure, there's a risk the government might not pay you back, but in a world where such a thing is actually possible, receiving loan payments will be the least of your concerns).
Either way, Treasuries carry the lowest risk of default. They've been around the longest. Their borrower has deeper pockets than anyone you know. The market for them is bigger than for any other loans. Simply put, they set the tone for everything else.
To use an analogy I've used in the past, the 10yr yield is like an aircraft carrier and other rates are like planes, helicopters, soldiers, rafts, boats, and unmanned submersibles that are along for the ride. At any given time, mortgage rates may or may not be on the deck of the USS 10yr Yield, but as long as the seas are calm, they're generally not far.
In rare cases, the USS 10yr can move too quickly or erratically for mortgages and the latter can jump ship and opt to follow along in their own little row boat. The faster the big boat moves and the more erratically it moves, the harder it is for the little boat to catch up. If things are crazy enough, the little boat may just camp out on a convenient nearby desert island until the volatility blows over. That's basically where we are now when it comes to the mortgage vs Treasury relationship.
Of course there are factual and objective underlying reasons for this, but it's much easier to understand in terms of the analogy. The net effect is that the bonds that actually dictate mortgages (Mortgage-backed-securities or MBS) haven't improved nearly as quickly as 10yr Treasuries. Moreover, lenders themselves are hesitant to drop rates too quickly because doing so will lead to more of those "factual and objective underlying reasons" for the underperformance mentioned above
For those who simply must attempt to understand the nitty gritty details, this is about as simply as I can put it: most of the time, the average mortgage is only profitable to investors if it lasts. The quicker mortgages are paid off, even if via refinancing, the less valuable they are to investors. When investors pay less for mortgages, it puts upward pressure on rates. That upward pressure can be big enough to offset the downward pressure coming from the general improvement in the bond market. In other words, the mortgage market's rowboat can temporarily move in the opposite direction from the aircraft carrier. The net effect of that net effect is that mortgage lenders simply don't have much to work with when it comes to pushing rates any lower. Even if they did, it would still be slow going because mortgage lenders have a similar relationship with MBS as MBS have with Treasuries.
Bottom line: rates aren't as low as you think they should be if you're a person who follows the 10yr. And it's going to take weeks if not months for the mortgage market to hop in its dinghy and row row row back toward the big boat.
29MM SHARES CAN BE REPURCHASED WITH $411MM AUTHORIZATION
AT $14/SHARE, 29MM SHARES CAN BE REPURCHASED UNDER REPURCHASE PROGRAM AUTHORIZATION.
THAT'S ROUGHLY, 7.8% of total diluted share count. That would add to shareholder's value and boost earnings estimates going forward.
DECOYS..BUY AND HOLD BE REWARDED
$MTG reported 6 new insider trades to the SEC in the last 2 minutes.
$121,780.83 of shares sold by Zandi Mark (Director) newsfilter.io/articles/4-fo...
$121,780.83 of shares sold by Carr Cassandra C (Director) newsfilter.io/articles/4-fo...
$121,780.83 of shares sold by Lehman Michael E (Director) newsfilter.io/articles/4-fo...
$121,780.83 of shares sold by Chaplin C Edward (Director) newsfilter.io/articles/4-fo...
$121,780.83 of shares sold by Culver Curt S (Director) newsfilter.io/articles/4-fo...
$121,780.83 of shares sold by Kozlak Jodee A (Director) newsfilter.io/articles/4-fo...
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BUY AND HOLD MTG * 7.5% ~ RETURN ON REPURCHASE AUTHORIZATION
WITH $411 MILLION SHARE REPURCHASE AUTHORIZATION OUTSTANDING, THE UPSIDE POTENTIAL IS APPROXIMATELY 7.5 % RETURN PLUS APPROXIMATELY 1.75 ANNUAL DIVIDEND YIELD