Posted: May 24, 2019
Mortgage Services Industry is Running Strong

Low unemployment, rising wages, falling 30 and 15-year mortgage rates, pent-up buying and a positive economic horizon are all propelling mortgage services and private insurance companies to the forefront of investment grade.  In turn, the industry has made customer service and tech insertion key components to not just retain existing but to entice new policies from first, move-up and vacation-home home buyers who reflect the increasing consumer confidence in the present and future US economy. The middle of the curve seems fairly content.  It's the ends of the curve that are in dire need of attention - GSE Reform and Affordability Options.  Here are a few service companies getting it right -



"The outlook is very positive right now in our view," B. Riley FBR Managing Director Randy Binner told Investor's Business Daily. "You saw a drop in the first quarter in the 30-year fixed mortgage rate, which has raised prospects of continued mortgage issuance. More activity is viewed positively across the mortgage space."


CFRA Research Director Ken Leon said the industry remains in much better shape than even six months ago. "You saw a dramatic change from November 2018 when the 30-year fixed rate mortgage was about 4.8%; now its closer to 4%," he said. "That has spurred increased traffic by prospective homebuyers and is likely to show a boost to higher new and existing home sales."  Most investors appear to be thinking that rates will not increase for 18 months or longer.

Lending Tree


Lending Tree operates an online lending marketplace that connects consumers with multiple lenders. It is not a direct supplier of loans, and instead acts as a broker.  LendingTree has a large, addressable audience of proactive deal seekers and savvy online shoppers across all ages and demographics. Lending Tree has a large wave of ambitious newcomers, including younger audiences. They are paying off student loans, having children, and buying their first homes.


1st Quarter 2019 revenue surged 45% to $262.4 million — above expectations. Management also boosted second-quarter and full-year revenue guidance. Over the past 3 years average Earnings per Share has grown 216%.


Tech insert has made the mortgge search and receipt process less burdensome and confusing.  Leads from lenders to consumers are of higher quality which creates a higher sense of trust and reliability among all participants; borrowers and lenders.


Essent Group


Essent Group serves the housing finance industry by offering mortgage insurance, reinsurance and risk management products to mortgage lenders and investors to support homeownership. Falling mortgage rates, now barely above 4.05%, means new business will be the key driver for Essent's prosperity.


Revenue growth at Essent over the past three years has averged 27%. Other financial highlights for the 1st Qtr 2019:

  • Insurance in force was $143.2 billion, compared to $115.3 billion end of Q1 2018.
  • New insurance written was $11.0 billion, compared to $9.3 billion end of Q1 2018.
  • Net premiums earned were $177.8 million, compared to $152.6 million end of Q1 2018.
  • The expense ratio was 23.1%, compared to 25.0% end of Q1 2018.


Old fashion keys to Essents' success - Trust, Knowledge, Share the Wealth, Lead by Example.


NMI Holdings


National Mortgage Insurance Holdings enables low down payment borrowers to realize home ownership, while protecting lenders and investors against losses related to a borrower’s default.  NMIH's Rate GPS (Granular Pricing System) represents an important evolution in pricing approach and risk-selection capabilities, making substantial enhancements to the pricing process. NMIH has benefitted significantly from the surge in new home buyers with a three year average revenue growth rate of 67%.; specifically,


  • Total 1st Qtr 2019 revenue was $81.106 million compared to $59.552 million end of Q1 2018.
  • Net income was $32.899 million compared to $22.355 million  end of Q1 2018.


Additionally, in April, NMI Holdings announced it had been recognized, for the 4th year in a row, as a Great Place to Work®.  Great Place to Work is a global authority on workplace culture, employee experience and leadership, and partners with FORTUNE to produce the annual FORTUNE "100 Best Companies to Work For®” list.




When is the best time to repair a busted roof, when the sun is out or when the panels have turned to blue tarps? If now isn't time to de-couple the government from holding the hands of Freddie and Fannie - when is?


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Good luck!


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