NEW YORK, NY--(Marketwire -11/29/11)- With the Global Financial Crisis showing no signs of slowing, Mortgage Insurers continue to struggle. The amount of underwater mortgages and loan delinquencies remain high, and despite low interest rates for home loans, many people are still steering clear of purchasing a new home until the economic outlook is clearer. The Paragon Report examines investing opportunities in the Property & Casualty Insurance Industry and provides equity research on PMI Group, Inc. (Pinksheets: PPMIQ.PK - News) and MGIC Investment Corporation (NYSE: MTG - News). Access to the full company reports can be found at:
On Nov. 15, the Federal Housing Finance Agency, Fannie Mae and Freddie Mac announced new guidelines for the Home Affordable Refinance Program (HARP) in hopes of helping more struggling homeowners take advantage of lower interest rates and secure affordable mortgage payments.
Private Mortgage Insurance companies have been actively engaged in HARP since its inception. The Mortgage Insurance Companies of America (MICA) announced that the association, representing private mortgage insurance company members, endorses the revised HARP that was enhanced to better serve borrowers. Private mortgage insurance protects lenders from losses if a homeowner defaults and the lender doesn't recoup costs through foreclosure. The insurance costs the borrower a monthly fee, typically a set percentage of the total mortgage loan.
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Unfortunately many MICA members are firmly on the downswing of late. Private mortgage insurer PMI Group Inc. filed for Chapter 11 bankruptcy protection after an Arizona judge rejected its bid to overturn the October seizure of its mortgage-insurance unit by state regulators. The stock is now de-listed from the New York Stock Exchange. PMI Group has been removed from NYSE and will be trading on the pink sheet under the ticker symbol PPMIQ.
MGIC, the principal subsidiary of MGIC Investment Corporation, is the nation's leading provider of private mortgage insurance coverage with $179.0 billion primary insurance in force covering 1.1 million mortgages as of September 30, 2011. Total revenues for the third quarter were $337.2 million, down 12 percent year over year. Net premiums written dropped 8.4% year on year due to stricter loan payout requirements that caused an overall decline in business for mortgage insurers underwriting these loans.
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- MGIC Investment Corporation
- Mortgage Insurers
- Private mortgage insurance