Insuring mortgages continues to be more profitable than originating and
But as lenders increasingly demand insurance products that let them
Four mortgage insurers reported their earnings this week. MGIC
Earnings per share came to 72 cents, slightly exceeding analysts'
PMI Group, San Francisco, reported net income of $41.9 million. The rise
CMAC Investment Corp.'s net income increased 21%, to $19.3 million.
Earnings per share for the Philadelphia insurer rose 22%, to 79 cents,
And net income for the smallest mortgage insurer, Triad Guaranty Inc.,
Amerin Corp. is scheduled to report its earnings next week. GE Capital
Some analysts are beginning to doubt the insurers' prosperity can last
One concern is new competition.
"Things have been so good for so long that lenders want to get a piece
To stay competitive insurers quickly match others' discounts or new
"There is no reason to suggest pricing will go higher. That is
Insurers have been heavily marketing products such as captive
With captive reinsurance, for example, lenders assume some default risk
Four banks-Chase Manhattan Corp., PNC Bank Corp., Banc One Corp., and
A fifth bank, First Union Corp., also has a reinsurance subsidiary, but
Mr. Ciskowski said he expects more banks to apply for mortgage
Gary Gordon, an analyst with PaineWebber, said a slowdown in revenue has
But new products aren't the only reason for lower prices, according to
He said mortgage insurers are more efficient than a few years ago and
"It's important to note that lot of the discounted prices are simply