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MGIC Investment Corp. Message Board

  • wintermutev04 wintermutev04 Nov 9, 2012 1:11 PM Flag

    MTG is getting a reputation is a stable servicer; RDN a bad rep for its denials.

    Honnestly, how long did RDN think it could go with such a high Denial rate compared to MTG and GNW before people started to notice the scope of it and get annoyed?

    Sector, servicers, and customers did notice MTG's capital ratio issue. But based on 3Q NIW and HARP data, relative to YOY and RDN, their NIW is still quite strong. Especially considering they're demanding higher credit/FICO scores (check the #s), where as RDN is accepting riskier NIW more liberally.

    But the same sector, servicers, and customers are also beginning to notice RDN's denial rates.

    You do that for too long and you think anyone wants to buy policy for you?

    That will eventually be RDN's loss and MTG's gain.

    I'm long RDN and MTG right now. But 4Q or 1Q, depending on monthly data, I will likely short RDN because I feel sooner or later, many of those denials are going to be forced back onto their books, and their quarterly losses are going to jump from an unbelievable 200m, past MTG's 450m, and maybe as high as 600m if they regulators force too much onto their books at the same time.

    If their revenue begins to drop because of their bad reputation of Denying policy and during the same quarter, their NIW drops because of it, then they're in for a repeat of MTG Q2.

    And it will be MTG's gain, who, at that point, will have taken their problems face on and dealt with them honestly.. Why do you think FM is being so lenient with MTG? They recognize their honest numbers. You think FM is going to feel the same for RDN after how they've treated Denials? I don't know.

    But MTG will be on the path to recovery and any RDN loss will be MTG gain.

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