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Radian Group Inc. Message Board

  • Kirkinterloch Kirkinterloch Apr 22, 1999 2:28 PM Flag

    Mortgage Insurance Providers...

    On its web site, Triad (TGIC) claims there are 8 providers of mortgage insurance in the country. I am aware of MTG and CMT, can anyone tell me the other 5?

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    • Things appear considerably better. Stock price has rallied considerably since January. I understands analysts have targets of up to 80+ on the stock. What's your view?

    • Jeff Morris, INVESCO Funds, On Financial Sector &
      Financial services sector has been under pressure from Fed
      Stocks move about 2 months ahead of the end of the Fed
      If we saw that the end was in sight, market
      environment would feel that the Fed had done its
      Financial stocks can stand about 100 basis points this year
      and still do fine.
      Sector has benefited from
      rotation out of tech stocks. Has moved higher since March,
      up about 20% from lows.
      Merger activity has gone
      on in Europe which still has several years' worth of
      restructuring to do. It will be subject to near term concerns.
      It could cool off but business is still
      There are some cheap stocks out there in terms of P/E

    • is in its semi-annual correction phase for no good reason again! What do you think ratemobile, looking better every day. I wish for $35 and I'm all over this baby!

    • I am also in the industry and was with CMT. CMT
      is the surviving entity of the recent merger. AMN
      has taken over sales and risk. CMT had a much better
      risk evaluater than MTG. Acctually predicting loss and
      not just default, like the one used by MTG. However,
      knowing what is a high risk to either go into a default
      or a loss and not insuring it are two different
      things. both companies would and probably still will
      insure anything they can get their hamds on. GE runs hot
      and cold on the credit policy. Hot to get market
      share then cold when the quality is evaluated on NIW
      (New Insurance Written). PMA was looked at by CMT
      before the deal with AMN was finalized. AMN tried to
      sell to CMT in 1996 but was way overpricing itself.
      CMT or RDN is "coasts" heavy when it comes to
      business. MTG is over exposed in numerous markets.

    • If you�re interested in Pre IPO investments you should call U.S. Funding at 1-888-999-8068. You can also e-mail them at:

    • analysis of MTG's liquidation value. If I had the
      time to do it it would be very similar in theory.
      However, I was merely stating what one analyst (I think
      Mr. Gray from Sanford Berenstein) discussed several
      months ago. Now this might have been when MTG stock was
      in the mid-thirties, which is very close to
      liquidation value. I do have to agree MTG is above its
      liquidation value now, however, it's still a bargain for a
      potential suitor,who would be crazy to just run it

      Sorry for the confusion.

      BTW, it has been
      holding up quite nicely in the current


    • = no income verification...these guys insure this
      junk up to 95% !!! rdn and pma insure 100% ltv's. the
      cash they have, i think could go alot quicker than
      anyone thinks. plus the pool reserves can't be touched
      unless it's for losses in that particular pool...sorry,
      got to to you later

    • I am not sure how you determine that MTG is
      trading at liquidation value. In order to determine
      liquidation I start with book value and add the revenues that
      are coming off the insured loans, less expenses, less
      losses, plus the income from the investment portfolio,
      and tax affect the whole thing.

      Since MTG is
      trading at around 2.5x-3x book, you need to get a lot of
      future income in order to get to a liquidation value of
      $45 per share. I can understand PMI and RDN trading
      at or maybe even slightly above liquidation
      depending on one's assumptions (even though I don't think
      they are according to my analyses), but MTG is VERY
      far off.

      MTG's book value is $16 per share. I
      figure liquidation is about $25 - $30 per share.
      Although liquidation analysis is only a theoretical
      exercise (in that companies that do go into liquidation
      are usually placed there for a reason), I agree with
      you that it is still an interesting exercise to get a
      perspective on the ballpark value of all the business put on
      the books to date.

      The reality of the exercise
      is, if the company was put into liquidation, you
      would have premium revenues going down (pick a
      persistency rate). Losses would rise. (The book of business
      matures and enters its peak loss years. Also, as the
      better credits pay off MGIC would be left with more of
      the delinquent customers. The loss ratios, therefore
      would rise dramatically.) Expenses would fall
      dramatically. The investment income would rise. And, of course,
      you need to tax affect it.

      Let's assume for a
      minute, there are no expenses or losses (which of course
      there would be). There are only revenues. Also, let's
      discount it back. How about 10% ( a nice round number).
      Let's pick a persistency of 80% (a generous number) and
      a tax rate of 35% on the premiums and 10% on the
      investment portfolio (because there are muni

      I only did it for 15 years, because after that the
      numbers get really low. I get premiums of $2.9 billion
      over 15 years, $1.9 billion after taxes, and $1.6
      billion present value.

      For investment income, I
      assumed that grew based on 5.5% income on the investment
      portfolio plus 5.5% return on the new revenues from the
      premiums. That gave me $4.8 billion, $4.4 billion after
      taxes, $2.1 billion PV. The total is $3.7 billion after
      tax PV. Add that to the $1.8 billion book value and
      you get $5.5 billion. With 110,000 share outstanding
      you get about $50 per share. But, that's without any
      losses or expenses. Once you add losses and expenses to
      the equation, it is much, much less

      back of the envelope number: Assume that we start with
      $4.00 per share and income falls by 20% a year for the
      next 15 years and then goes to $0. The value would be
      about $29 per share. Either way, you don't get close to
      $45 per share.

    • stick to one board. Few more thoughts...

      don't know how OFHEO will affect any non aaa rated
      mortgage insurer, but neither of the aaa rated insurers
      are even #3 in terms of market share. I can't imagine
      that OFHEO would have any impact on that however it
      may impact the entire industry as GSE could see
      alternative forms of credit enhancements. MI just happens to
      be the most efficient at this stage.

      you explain the term "niv" I haven't heard that one.
      I have to agree with you on FICO's. They are way to
      arbitrary with not enough data to validate scores. The MI's
      have better models, it's just that FICO has become
      standard because of its lack of

      Personally, I think these niche products will not have a
      significant impact due to two and potentially three huge
      years of production from 1998-2000. By the time losses
      develop in the pool area (which I think is most
      susceptible), renewal premiums on these huge policy years which
      I estimate at potentially being 60-70% of total
      renewal will outweigh any real economic downturn. That's
      the beauty of these companies, they have some mcuh
      old cash coming in the door, that losses would have
      to be so widespread and concentrated in a 12-18
      month period to have a financial impact, and that isn't
      even talking about a liquidity/shut the doors

      I'm sure these companies could withstand even severe
      regional recessions without much suffering.

      As for
      values of these companies, I couldn't disagree more as
      these companies are all undervalued and actually have
      performed well over the past few trading days as the market
      has been tanking. They are almost acting
      counter-cyclical, which would be good when the bubble bursts
      sometime soon

      More thoughts,


    • very good points, however they both have had
      conversations with other mi's about a sale. the large holder of
      pmi was allstate and they have dumped everything.
      with mgic, it was n/western mutual and they sold all
      of it at the low. both these insurers know it is
      coming and that is why they got out. OFHEO regs will
      come to pass and it will change the complexion of non
      aaa companies with the gse's.

      as far as
      quality goes the rdn,pma,mtg all will be hurt. i hear the
      global thing but they are all stretched with capital due
      to g fee deals and you're right, they are a loss
      leader BUT they must retain capital for all loans in a
      pool even if they pay off until the last loan in that
      pool is gone. legally, they have done some deals which
      will not pass muster if looked at. the credit issues
      will be greater than the 80's due to A-, niv's, and
      the fact that i truly think this FICO based world is
      trading off of no real history as to how fico's will
      really perform. i do nothink they remember the lesson
      they learned. the market swelling has brought a lot of
      stocks up and anaylsts who are 25 years old have no clue
      as to how the 80's really were. Values are over done
      and these new niche programs will kill these guys.

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