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Strategies & Market Trends : Real estate and credit file cabinet - please read rules befo

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From: Ramsey Su	4/13/2006 10:52:08 AM
	of 13

MTG earnings From CC: Bulk margins very tight. Expect the JV contributions to decline this yr but so far as expected. Expect delinquencies to go up the third qtr seasonally. Subprime via flow are moving into the 2 yr aging period which should result in higher delinquencies but actuals are down now. Question re a CBASS purchase that is supposed to be excellent price and would realized gain be showing up? Answer unclear. Need to watch CBASS if they are going to do some big gainers but sherman is the one which did so well last yr that it is hard to duplicate this yr. (not sure why) MI now may be cheaper than piggy backs so MI used more frequently by lenders. As exotic mortgages vol decline, more normal loans return = more MI loans? Special dividend: would not be more than last year. Holding company: has little money for buybacks, only a couple of million. International business has long time potential but not likely till end of 06, more than likely 07. Delinquency drop for the qtr just seasonal and expected, not a changing trend. 9.5% penetration last yr, did expect it to go up to 11%. MTG expecting it will be higher than 9.5% this yr. Bulk spreads BB over Libor, bottomed around early 05 and also seems to have a lot of buyers for these lower tranches. With the market conditions, MTG expected the spreads to widen but that has not been the case. They do not understand who are buying the junk. Risk reserve ratio at 6ish - 1 vs what one question asked should it not be at 12ish - 1, especially as yr after yr (recent) that the reserve proved to be unnecessary. So why can't MTG borrow more and buy back more shrs? Unclear whether they will be buying back more shares. This is still a sector that is totally dependent on which way the RE market moves. =========== From PR: Revenue slightly light. Earnings 1.87 much higher than street expectations of 1.62. Delinquencies dropped from 85,788 (5300 Katrina) to 76,362 (3100 Katrina). Though supposed to be seasonal, that is still lower than expected. 4% delinquency vs 4.52% last qtr. Including bulk, 6% vs 6.58% last qtr. Losses $114.9M up from $98.9M yoy. Now that is consistent with market conditions as cures should be more difficult and loss per claim should be higher. Persistency is slightly higher at 62. $166.9B insurance in force. New this qtr was $10B vs $11.4B last yr but % of bulk dropped. only $2.1B vs $2.5B last yr.

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