Wed, Mar. 4, 9:36 AM
Wed, Jan. 7, 12:45 PM
Wed, Jan. 7, 10:31 AM
- Bloomberg's Jonathan Allen and Clea Benson report the president will announce a 50 basis point cut in FHA premiums to 0.85% at an event in Phoenix tomorrow.
- The private mortgage insurers have over the last couple of years enjoyed an increase in market share following boosts in FHA premiums, and are sinking today on this news.
- Radian (RDN -5.5%), MGIC (MTG -6.9%), Essent Group (ESNT -8.2%), NMI Holdings (NMIH -1.3%).
Sep. 17, 2014, 8:03 AM
- The monetization of Radian Asset, improvement in the legacy credit book, and the strategic potential of the Clayton acquisition are the catalysts, as analyst Jason Stewart upgrades Radian Group (NYSE:RDN) to a Buy with $20 price target.
- Noting Essent Group (NYSE:ESNT) has appreciated to within 9% of its price target, he downgrades the stock to a Neutral. "While the newer PMI entrants, including ESNT, are in an advantageous position under the proposed PMIERs, the current valuation of ESNT reflects this position."
- NMIH Holdings (NASDAQ:NMIH) is reiterated as a Buy and Top Pick, but the price target is cut to $16 from $17.50. "We see the greatest upside in NMIH as the equity valuation converges with peers while the company executes their business model and the stock is ultimately valued on run rate EPS, which we expect to be achieved in H1 2016."
- RDN +1.2% premarket
Jul. 11, 2014, 8:38 AM
- An update on the mortgage insurers as a premarket slump in their stock prices has turned into a rout in the wake of proposed new rules from the FHFA which would force sizable capital raises. MGIC Investment (MTG) -15%, Radian (RDN) -7.2%, Genworth (GNW) -4.8%. Also worth keeping an eye on is Old Republic (ORI).
- Goldman chimes in, removing MGIC from its Conviction Buy list.
- There's no action in newer mortgage insurers National MI (NMIH) and Essent Group (ESNT), but neither are burdened by any legacy issues and both welcome the new rules, with Essent saying it's already in compliance.
- NMIH response
- Previously: Radian is not pleased
- Previously: Genworth will need to raise about $500M
Jul. 11, 2014, 7:15 AM
- A check of the mortgage insurers the morning after the FHFA released the proposed Private Mortgage Insurer Eligibility Requirements (PMIERs) finds Radian (RDN) lower by 2.8%, MGIC (MTG) by 2.6%, and no action in Genworth (GNW), Essent Group (ESNT), and NMI Holdings (NMIH). The revised PMIERs would require higher capital standards on the mortgage insurers Fannie Mae (FNMA) and Freddie Mac (FMCC) do business with.
- The new rules are open for comment until September 8, and Radian expects to give the FHFA an earful, including noting the new capital requirements "are more onerous than the company's historical default experience suggests would be needed to withstand a severe stress event." The proposed PMIERs, says Radian, are also not consistent with the FHFA's goal of expanding access to mortgage credit by boosting the role of private capital in the mortgage market.
- Radian also notes it is likely to be January 2017 before compliance with any new rules would be required.
Apr. 22, 2014, 5:08 PM
- A check of action in the mortgage insurers today following MGIC Investment's (MTG +7.3%) Q1 results finds them accentuating the positive. MGIC's earnings came in ahead of expectations as legacy issues continue to fade, but the mortgage/housing slowdown is also leaving a mark. New insurance written fell from a year ago, as did revenue and net premiums written.
- CEO Curt Culver notes the "significant decline in refinance transactions compared to last year and the slow start in home sales."
- Genworth (GNW +4.7%), Radian (RDN +3.7%), Old Republic (ORI +2.1%), NMI Holdings (NMIH +1.1%), Essent Group (ESNT +0.2%).
Feb. 21, 2014, 12:50 PM
- Essent Group (ESNT -2.6%) gets its 2nd downgrade in the two days following its first earnings report as a public company as KBW pulls its Buy rating (JMP did the same yesterday).
- A check of the earnings call transcript finds neither KBW's Bose George nor JMP's Christine Worley hinting at any displeasure with results. New to business, Essnet is more growth play than improving credit play and the mortgage business has slowed significantly. George did question whether management had a feel for if market share (12% in 2013) was improving of late (company isn't able to say yet). Management also expects continued shrinkage in the origination market this year, with industry NIW to be around $150B-$160B.
Feb. 19, 2014, 2:40 PM
- Investors sell the news following Essent Group's (ESNT -7%) earnings beat this morning, but BTIG's Mark Palmer reminds the newish company - unencumbered by legacy losses - is a growth play in the mortgage insurance sector rather than a play on improving credit.
- Primary insurance in force of $32B as of Dec. 31 is up 135% from a year ago. New insurance written of $4.5B compares to $4B a year ago. For the full year, NIW of $21.2B vs. $11.2B in 2012.
- Net premiums earned of $40.3M compares to $16.5M a year ago. The expense ratio of 55.3% compares to 100.2%.
- Press release, Q4 results
Jan. 14, 2014, 9:42 AM
- After Essent Group's (ESNT -1.4%) flier of an IPO and a big run since, Macquarie cashes in its chips, downgrading the stock to a Neutral with price target remaining at $25.
- Originally expected to come public at about $14.50 per share, Essent priced at $17 in late October, and - prior to this morning's downgrade - had run to above $23.
Dec. 23, 2013, 2:22 PM
- Homebuilders and private mortgage insurers are partying thanks to incoming FHFA chief Mel Watts' weekend move to postpone an increase in fees which would have raised significantly raised mortgage costs for those with good, but not stellar credit and less than 20% to put down.
- "This is a victory for the housing finance industry," says FBR's Edward Mills. "We believe that this is the first of a series of decisions by incoming Director Watt to preserve/expand mortgage credit availability ... We view this announcement as positive for housing generally, but specifically for private mortgage insurers, originators, and homebuilders."
- Homebuilder ETFs: XHB +2%, ITB +2.8%.
- Homebuilder names: Toll Brothers (TOL +3.9%), Putle (PHM +5%), Lennar (LEN +3.2%), KB Home (KBH +6.9%), Hovnanian (HOV +4.8%), D.R. Horton (DHI +2.8%), Standard Pacific (SPF +4%).
- Mortgage insurers: Radian (RDN +4.1%), MGIC (MTG +1.1%), Genworth (GNW +1.6%), Old Republic (ORI +0.7%), NMI Holdings (NMIH +1.1%). Essent Group (ESNT -0.6%) is off a hair, but up 29% since its late-October IPO.
- Not showing much reaction today, but potentially set up to disappoint if the GSEs do not allow any private oxygen in mortgage finance are Redwood Trust (RWT -0.2%) and PennyMac Financial (PFSI +1.2%).
Dec. 5, 2013, 9:54 AM
- "We are positive on private mortgage insurers, as we believe their pace of credit improvement and timing of normalized earnings is underestimated by the market," says analyst Eric Beardsley. "The sector also has one of the strongest secular tailwinds among financials as FHA reform drives increased demand for private mortgage insurance. MGIC Investment (MTG +3.9%) is currently our favorite name in the group primarily because it has the most upside to our price target ($10)."
- "Radian (RDN +0.8%) is our second favorite stock in our coverage universe with 18% upside to our price target ($17)."
- Earlier: New IPO Essent Group (ESNT -0.6%) just rates a Hold.
Nov. 14, 2013, 2:35 PM
- Maybe Bruce Berkowitz has it exactly right with his plan to take the mortgage guarantee business of the GSEs and turn it into a state-regulated mortgage insurer without government backing. Radian (RDN +2.4%) and MGIC Investment (MTG +1.2%) continue to be among the year's strongest performers (GNW too, though it's not a pure MI play).
- Fresh off its successful IPO, Essent Group (ESNT +3.2%) - the newest public MI entrant - is initiated with a Buy and $25 price target at JMP Securities.
Nov. 7, 2013, 12:07 PM
- We "anticipate increased competition in our industry from new and existing mortgage insurance companies," says Radian (RDN -6.2%) CEO S.A. Ibrahim. "Competitors recently reduced their borrower-paid mortgage insurance premiums by 5 basis points, which we promptly matched.”
- Radian's Q3 results
- Backed by heavyweights Soros, Goldman, and JPMorgan, Essent Group (ESNT -0.6%) came public last week, while NMI Holdings - backed by Carlyle, Kyle Bass, and BlueMountain - also contemplates an IPO.
- Others taking a hit today: MGIC Investment (MTG -3.8%), and Genworth (GNW -2.2%)
Nov. 5, 2013, 10:44 AM
- Showing relative strength on a red day are the mortgage insurers, particularly MGIC Investment (MTG +3.9%) as KBW doesn't find the air too thin after the stock's more than quintupled over the past year, and upgrades to Buy with price target hiked to $10 from $9.
- Others: Radian (RDN +1.4%), and (not a pure-MI play) Genworth (GNW +0.9%).
- Freshly IPOed Essent Group (ESNT -0.1%) is about 29% above its offering price.
Oct. 31, 2013, 10:14 AM
- The mortgage insurer backed by Soros and Goldman is up 28.5% to $21.84 in early trades after pricing its IPO at $17 per share, well above the planned range of $13.50-$15.50.
- BTIG's Mark Palmer rates the stock a Buy with price target of $28 - 3.5x estimated book value per share of $7.81. "We believe ESNT is very well positioned to benefit from the improving fundamentals of the U.S. housing market, the growing demand for mortgage insurance, and the U.S. government’s ongoing retreat from the mortgage insurance space."
- Previous coverage.
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