I've read a lot of posts on here that are suggesting that settling the arbitration case with Countrywide would wipe out the entire Countrywide delinquent inventory of 32000. However, after reading over the Q3 disclosure and the arbitration motion itself the dispute is only related to the initial 1,400 rescission from 09 plus any rescission that have occurred since, plus the ones they decided to hold off on rescinding. If I'm understanding it correctly the number of delinquencies in question is somewhere around 3-4K, not 32K. But honestly, there isn't much clarity on that, and for some reason the analysts on the CC never even ask about it. I'm long 15K shares, so this is by no means a bash, but I'm not so sure that 32K delinquencies are about to come off the books. Can someone clarify this for me with something substantiated?
Maybe this will help---This is from their 8k from August of 2012
At June 30, 2012, 33,304 loans in our primary delinquency inventory were Countrywide-related loans (approximately 22% of our primary delinquency inventory). As noted above, we have suspended Countrywide rescissions of coverage on loans that we believe could be included in a potential resolution with Countrywide. Although these loans are included in our delinquency inventory, for purposes of determining our reserve amounts, it is assumed that coverage on these loans will be rescinded. We expect a significant portion of the Countrywide loans in our delinquency inventory will cure their delinquency or their coverage will be rescinded and will not involve paid claims.
33,000 X's balance = reserves set aside as liabilities return to assets = higher share price. GS to insure that happens so the 135 millions shares just bought pay off. GS to take the entire option for 20,000,000 run the price to $10 plus...
Sentiment: Strong Buy
Bill this is what I got from Q4, 2,150 loan Countrywide potential payment claim of $160M and 250 loan from other customer which has a potential payment claim of $17M. I am not not sure if this is the dispute they are talking about. MGIC added to the aggregate impact loss reserve of 100M for the probable settlement agreement. I am totally lost too on the 32K dq loan that the message board is claiming here. This thus make sense to you?
What you say makes sense. Logically, you'd think there would also be a legal impact on the remaining Countrywide delinquencies. Meaning they'd agree to how to handle future rescission, but honestly I'm just not clear on it. Either way it's a positive because it removes a big uncertainty.
the number of delinquencies coming off the books is a moot point, the fact is mtg added $100M to reserves in advance of the settlement, even if dqs are "removed" from the dq bucket, it is meaningless - their reserves won't go down, and in fact they have already gone up.
Paid if you know about this dispute between MGIC and Countrywide? Can you enlighten me what this all about. Many poster here claiming about 32K dq loan in the stakes. Please answer me in plain and simple English so i can comprehend it and to remove my doubt about this. MGIC is saying that "they made a substantial progress in reaching an agreement with Countrywide to settle the dispute they have regarding rescission's." My question is 1. If they settle this dispute are we going to get some money from Countrywide or wipe the loan in dispute? 2. Is MGIC reserve $$ for this rescission will become an added capital to further reduce risk to capital ratio. I need your honest answer please.
the number of delinquencies removed is certainly NOT moot point. That's a ridiculous thing to say, but then again you went "massively short" at 2.6. I appreciate any opinions that are genuine, but you're just one of those guys who feels confident saying disingenuous stuff because we're on a message board. Eliminating 20% of their delinquent inventory directly effects the way investors perceive their existing reserve amounts. This stock is going to $10 regardless, that would just get it there sooner. Again, extremely relevant.