Mortgage Insurers Improving But Still Face Headwinds
October 07, 2010 7:11 AM
While the trend in delinquencies remains the most important factor for the mortgage insurance companies in the view of Keefe Bruyette & Woods, several other data points will be of interest in the third quarter. In terms of rescissions, it believes the market is conditioned for a modest slowdown in put-backs from the mortgage insurers both as the number
of un-reviewed loans shrinks and as they try to strengthen relationships with lenders.
Keefe Bruyette & Woods has cut earnings forecasts for two insurers, PMI Group (NYSE: PMI) and Radian Group Inc. (NYSE: RDN). PMI EPS estimate dropped to $(3.33) from $(3.05) and RDN dropped to $(4.99) from $(4.90).
Overall, Keefe Bruyette & Woods remain positive on the space entering third quarter earnings, as delinquency trends remain favorable and market share traction could provide positive momentum for the industry.
PMI closed Wednesday at $3.89
RDN closed Wednesday at $8.16
