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lyip
1594 Posts |
 Posted - 07/16/2008 : 12:36:58 PM
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| Meanwhile 100+ banks have gone belly up? Does any one know what the PMI companies have paid out so far? |
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mcmoney
300 Posts |
Posted - 07/16/2008 : 12:38:54 PM
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My God. Have you seen there rates? Ha ha!
I've heard that they're real good about auditing files to discover enough information to breach reps/warranties and not pay out to lenders. No information/stats to support this, just what I've heard "out there"..... |
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dkendall1979
10125 Posts |
Posted - 07/16/2008 : 12:41:58 PM
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MI companies are parts of large insurance companies that are not 100% dependent upon the MBS market.
However, lets say worst case scenario 1 in 10 loans go bad, that's still a profit on 9 loans.
I don't know what their books look like, but I imagine they're still very profitable even in this enviroment. Insurance companies NEVER lose. |
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MisterVA
6563 Posts |
Posted - 07/16/2008 : 1:00:59 PM
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| They are banking on the high pct of loans that will not default. Meanwhile there are fewer refis meaning the income stream on the satisfactory accounts will continue for a longer period of time. With each tightening, there are fewer and fewer new loans being insured and the risk is not as great. My PMI rep [generic not a company name] thinks there will be a movement back of significant reserves for loan losses at some point and the stock will take off. Probably not to pre-06 levels, though. |
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FundStar14
751 Posts |
Posted - 07/16/2008 : 1:20:11 PM
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| I would also think that a few years back when most of the bad loans were written that are now defaulting, many of them had 2nd's instead of MI. |
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lyip
1594 Posts |
Posted - 07/16/2008 : 1:29:15 PM
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But how many hundreds of the good loans would it take to pay for one bad loan?
What puzzles me is when 100's of lenders are losing billions EACH, how much of the 4 or 5 major PMI co's have lost? How are they able to pay? |
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bobabrahamson
86 Posts |
Posted - 07/16/2008 : 1:43:39 PM
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| PMI rates just went up an average of 20 bps. That should help our customers who are already struggling to qualify. |
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808
2498 Posts |
Posted - 07/16/2008 : 1:48:50 PM
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quote:
Originally posted by lyip
But how many hundreds of the good loans would it take to pay for one bad loan?
What puzzles me is when 100's of lenders are losing billions EACH, how much of the 4 or 5 major PMI co's have lost? How are they able to pay?
they only insure down to 80%, the lender is on the hook for the rest, plus their probably shorting the lenders right now like every other hedge fund is |
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jmarx
4 Posts |
Posted - 07/16/2008 : 2:12:00 PM
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You'd be surprised how many loans need to perform to make up for the loss of a single default.
quote:
Originally posted by dkendall1979
MI companies are parts of large insurance companies that are not 100% dependent upon the MBS market.
However, lets say worst case scenario 1 in 10 loans go bad, that's still a profit on 9 loans.
I don't know what their books look like, but I imagine they're still very profitable even in this enviroment. Insurance companies NEVER lose.
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dkendall1979
10125 Posts |
Posted - 07/16/2008 : 2:17:01 PM
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Well, the real number is 1 in 400+ right now in the US and the majority of the defaults are geared towards the subprime loans, which the MI companies aren't taking the hit on.
quote:
Originally posted by jmarx
You'd be surprised how many loans need to perform to make up for the loss of a single default.
quote:
Originally posted by dkendall1979
MI companies are parts of large insurance companies that are not 100% dependent upon the MBS market.
However, lets say worst case scenario 1 in 10 loans go bad, that's still a profit on 9 loans.
I don't know what their books look like, but I imagine they're still very profitable even in this enviroment. Insurance companies NEVER lose.
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nowbroker
1361 Posts |
Posted - 07/16/2008 : 2:49:17 PM
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quote:
I would also think that a few years back when most of the bad loans were written that are now defaulting, many of them had 2nd's instead of MI.
I totally agree with this post, in the last 2-3 years nobody was really using MI companies, this has helped save their bacon. |
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nowbroker
1361 Posts |
Posted - 07/16/2008 : 2:49:47 PM
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quote:
I would also think that a few years back when most of the bad loans were written that are now defaulting, many of them had 2nd's instead of MI.
I totally agree with this post, in the last 2-3 years nobody was really using MI companies, this has helped save their bacon. |
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