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DS News Webcast: Tuesday 10/13/2015

Insurer MGIC, which provides mortgage insurance through its principal subsidiary Mortgage Guaranty Insurance Corp., saw its stock rise 2 percent in morning trading after Keefe, Bruyette & Woods analysts gave the company a vote of confidence. KBW raised MGIC to “outperform” from market perform on Monday.

For MGIC, three years appears to have made a great difference. In 2012, MGIC reported 2 point 2 billion dollars in newly written contracts and 148 thousand 885 delinquent loans in its inventory by the end of September. Fast-forward to 2015, the insurer increased its new contracts to 3 point 9 billion dollars, and delinquent loans declined 56 percent to only 64 thousand 642.

The uncertainty surrounding the highly anticipated interest rate hike has kept the industry on its toes about just when the Federal Open Market Committee will raise rates, but New York Fed President William Dudley has recently reversed his initial forecast for the increase, presenting even more skepticism. Dudley noted that his original forecast was altered by questions about a slowing global economy and its effect on the U.S. economy, which could potentially delay the rate increase further.

About Author: Jordan Funderburk

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