Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (5245)	11/8/1998 2:39:00 AM
From: MCsweet	Respond to of 78534

On MTG By my criteria MTG is not a value stock (P/B and P/S too high). But it could be a good GARP stock and others may disagree with my views on value investing. MC

To: Paul Senior who wrote (5245)	11/8/1998 11:05:00 AM
From: TimbaBear	Respond to of 78534

I have some general thoughts about MI (mortgage insurance)companies....I am a residential mortgage loan originator for a major bank in Florida and my thoughts come from that perspective, not from having done any analysis whatsoever on any of the MI companies (like MGIC). The growing trend in the mortgage industry seems to be away from those loans in which MI is required. There are many different loan products that offer a combined package of a 1st mortgage that doesn't exceed 80%(the threshold over which MI is required)and a 2nd mortgage of 10 or 15%(and, increasingly, up to 20%). These packages are specifically designed to avoid the customer needing to have mortgage insurance. So there is a major erosion of the base of business going on here. On the positive side, some MI companies, and I think MGIC is one, are offering other types of service to the mortgage industry to offset the loss in revenues. Contract loan processing and underwriting comes to mind. I don't think that these other types of services are nearly as profitable as the MI business they replace, but I haven't looked at the numbers. The problem with the alternative sources of revenues is that they would dry up a lot faster if the mortgage volume drops off, because lenders would have in-house staff do the processing and underwriting.