Boston, MA 10/18/2013 (wallstreetpr) – MGIC Investment Corp. (NYSE:MTG), is a holding company and through wholly owned subsidiaries MTG is a private mortgage insurer in the United States.
MTG recently announced its third quarter results, and beats the street estimates by declaring a profit in spite of lower revenues. During the quarter, total revenue declined from $306.2 million to $254.4 million. After reporting loss last year, this was the second consecutive quarter where the company declares profit.
The improvement in the MTG performance was largely attributed to the recovery in housing market in the United States, due to prices were in affordable range in the segment, which helped the company as mortgage rates were low.
When borrowers go into foreclosure, Mortgage insurers pay to the lenders part of their expenses. The recent housing crisis resulted into floods of claims for MTG and other companies operating in the same segment, leading to loss for the full year. However, the situation has eased owing to the improvement in the economy.
The appreciation in the home price over the past few quarters, along with modest expansion in the employment generation, positively impacted the company financial results in the quarter gone by.
The delinquent loans have shrunk from 14.51% to 11.51%, excluding bulk loans which stand at 9.69% as against 12.34% for the same period last year. This indicates that quality of loan has improved as compared to last year. Net premiums written fell to $234.3 million from $263.5 million while net premiums earned declined to $231.9 million from $266.4 million.
It is believe that improvement in the economy and housing market segment led to lower mortgage delinquencies and claim, which helped the company to report better profitability as compared to street estimates. During the January – September 2013, MGIC reported a loss of $48.4 million, compared to a loss of $540.4 million, same period last year. The substantial improvement in performance is driven by the last two quarters result, which helped company to show the improvement in financial year compared to 2012.
