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Radian Group Inc. Message Board

  • tommiegun53 tommiegun53 Nov 16, 2012 12:39 PM Flag

    FHA fees increase will add $13 a month to an average loan insured, and annual fees continue for the life of FHA loans

    Soon we will get some brilliant analysis from mortgage insurance analyst as to the net effect for private mortgage insurance industry.

    Additionally, the FHA fees would stop annual payments after 10 years, now the annual payments would be required for the life of the loan

    Sentiment: Strong Buy

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    • Effective January 2013 the upfront premium will increase from 1.75% to 2.05%. On a typical $400K loan will increase from $7000 to $8,200. The name of the increase is FHA Fiscal Solvency Act of 2012.

      It's difficult for me calculate how much business the Private Mortgage Industry will benefit by the increase but, the PMI has increased it's marketshare by 15% since January 2011.

      Radian and AIG are the PMI market leaders with 29% followed by MGIC with 20%.

      Sentiment: Strong Buy

    • FHA marketshare has fallen since January 2010 from 80% to 63 as of September 2012. Corresponding, Radian and other mortgage insurers percentage has increased to 37%.

      Radian and AIG each have 29%, MGIC has 20%, and Genworth has 13%, and remainder is made up of smaller start-ups including essent guaranty of the private mortgage insurance sector.

      Start up PMIs are eager yo get into the lucrative mortgage insurance market but, it's not easily done create to get the necessary business contacts. Radian has expanded it's business over a very diversified base of customers with no customer having more than 10% of it's insurance issuance.

      Look for Radian to expand beyond the$36 billion for2012 of insurance to around $48 billions in 2013.based on the FHA business and increased marketshare from other insurers.

      Sentiment: Strong Buy

 
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