The $100 million reserve release back to profits for Countrywide settlement. In Q4 2012 MGIC set up additional $100 million reserves for Countrywide settlement, which was settled with $190.5 million savings.
The only catalyst for MTG to reach $6 will be a positive Countrywide Settlement. The overall market is shaky at these new highs and most investors are happy with the gains this year, have sold ~50% of their postions and waiting on the sidelines. Some Traders are shorting. I think market may drop 400-500 points simply because that's the way it works...RDN & MTG may drop about 8-10% at most...I believe we'll see a sudden jump for MTG to $6 in a short period on the news of settlement. Realistically, I do not think MTG will be profitable until Q3...this year but we'll see losses narrowing and beating expectations. RDN will have a profitable Q1 and will edge up to $12.
We are now able to reasonably estimate the probable loss associated with each probable settlement and, as required by ASC 450-20, we have recorded the estimated impact of the two probable settlements referred to above in our financial statements for the quarter ending December 31, 2012. The aggregate impact to loss reserves for the probable settlement agreements was an increase of approximately $100 million. This impact was somewhat offset by impacts to our return premium accrual and premium deficiency reserve. All of these impacts were reflected in the fourth quarter 2012 financial results. If we are not able to reach settlement with Countrywide, we intend to defend MGIC against any related legal proceedings, vigorously.
Key words " was an increase of approximately $100 million to the reserves" to cover the two probable settlements..Sorry tommie but I did the numbers...
They added the 100 mill because that was the amount that they felt they were short to handle the settlement, we have enough fools on the board, don't you start, i have read your other post and most of them are good. I picked up more this morning.