Genworth MI Division - Conference Call Very Upbeat
-US MI Division lost $34 million in Q4; effectively reducing earnings by .07 a share to .34.
- New CEO expects breakeven or modest profitability for US MI in either Q1 or Q2.
For 2013, new CEO stated, assuming no deterioration in the US housing market, the trend "heads towards the potential for really significant improvement in the overall US Mortgage Insurance earnings and potential for breakeven and modest profitability in Q1 or Q2." CEO described the tipping point Q3 and Q4 for earnings, when the new books from 2009 will comprise 40-45% of risk in force.
-These projections are based on conservative NIW of $15-20 billion; GNW did $5.1 Billion NIW in Q4.
- Delinquencies in 2013 expected to drop 15-20%.
- Loss Mitigation between $250-$350 Million (Was $165 Million in Q4 and $675 Million for 2012).
RDN had twice the NIW of GNW in Q4 to answer your question.
By further way of comparison, GNW is looking to break even on its MI business next Q when its healthier NIW from 2009 to present will be 40-45% of its total risk in force (i.e. its total book).
RDN, on the other hand, is already much further along in this transition to more profitable NIW (since 2009). At the 3rd Q conference call, RDN indicated:
Turning now to Radian's mortgage insurance book of business in Slide 19 on our webcast presentation. It is important to note that as of the third quarter, the 2009 to 2012 books grew to more than 40% of our primary risk in force, and the most problematic 2006 and '07 books are now down to under 28%.
If the pace of our new business volume continues, we expect that by mid-2013, our book of business written after 2008 will be larger than the book written in 2008 and prior.
In addition, the success of the latest HARP program has helped to further improve the credit profile of our legacy book.
Approximately 8% of our risk in force has been improved through a HARP refinance, and this, combined with our newer quality book of business, represents a strong portfolio that has grown to 48% of our total primary mortgage insurance risk in force.
By the end of this year, this combination of HARP plus the 2009 to 2012 book will represent more than 50% of our total risk in force.