An increasing number of economists, politicians and pundits have been sounding the alarm over Canada’s housing market. And while Canada’s financial system has a reputation for conservatism, we’ve been wondering ourselves how a nation of just 35 million can sustain an average home price of nearly CAD392,000 amid anemic economic growth.
Of course, homeowners have enjoyed an era of historically low interest rates, which has helped make higher prices more affordable, even if Finance Minister Jim Flaherty has tightened mortgage-lending regulations four times over the past several years.
Flaherty’s last change was in July 2012, when he shortened the amortization period on government-backed mortgages to 25 years from 30 years, while lowering the maximum amount homeowners can borrow against their homes to 80 percent from 85 percent. And he’s prepared to intervene again, if necessary.
Hot Industrial Conglomerate Stocks For 2015: The Travelers Companies Inc.(TRV)
The Travelers Companies, Inc., through its subsidiaries, provides various commercial and personal property and casualty insurance products and services to businesses, government units, associations, and individuals primarily in the United States. The company operates in three segments: Business Insurance; Financial, Professional, and International Insurance; and Personal Insurance. The Business Insurance segment offers property and casualty products and services, such as commercial multi-peril, property, general liability, commercial auto, and workers? compensation insurance. It operates in six groups: Select Accounts, which serves small businesses; Commercial Accounts that serves mid-sized businesses; National Accounts, which serves large companies; Industry-Focused Underwriting that serves targeted industries; Target Risk Underwriting, which serves commercial businesses requiring specialized product underwriting, claims handling, and risk management services; and Special ized Distribution that offers products to customers through licensed wholesale, general, and program agents. The Financial, Professional, and International Insurance segment provides surety and financial liability coverage, which uses a credit-based underwriting process; and property and casualty products primarily in the United States., the United Kingdom, Ireland, and Canada. The Personal Insurance segment offers property and casualty insurance covering personal risks, primarily automobile and homeowners insurance to individuals. It distributes its products through independent agents, sponsoring organizations, joint marketing arrangements with other insurers, and direct marketing. The company was founded in 1853 and is based in New York, New York.
Advisors' Opinion:- [By Charley Blaine]
Travelers Companies (NYSE: TRV): Tuesday close: $92.91. RSI: 78.
The stock is up 2.6 percent in May and 9.3 percent for the quarter. At some point, investors will take profits in the stock. And probably soon.
Top Financial Stocks To Own For 2014: MGIC Investment Corp (MTG)
MGIC Investment Corporation (MGIC), incorporated June 21, 1984, is a holding company and through wholly owned subsidiaries is a private mortgage insurer in the United States. As of December 31, 2012, its principal mortgage insurance subsidiaries, Mortgage Guaranty Insurance Corporation (MGIC) and MGIC Indemnity Corporation (MIC), were each licensed in all 50 states of the United States, the District of Columbia and Puerto Rico. During the year ending December 31, 2012, the Company wrote new insurance in each of those jurisdictions in MGIC and/or MIC. The Company capitalized MIC to write new insurance in certain jurisdictions where MGIC no longer meets, and is unable to obtain a waiver of, those jurisdictions��minimum capital requirements. Private mortgage insurance covers losses from homeowner defaults on residential mortgage loans, reducing and, in some instances, eliminating the loss to the insured institution if the homeowner defaults.
Mortgage Insurance
Primary insurance provides mortgage default protection on individual loans and covers unpaid loan principal, delinquent interest and certain expenses associated with the default and subsequent foreclosure. Primary insurance is written on first mortgage loans secured by owner occupied single-family homes, which are one-to-four family homes and condominiums. Primary insurance is also written on first liens secured by non-owner occupied single-family homes, which are referred to in the home mortgage lending industry as investor loans, and on vacation or second homes. Primary coverage can be used on any type of residential mortgage loan instrument approved by the mortgage insurer.
When a borrower refinances a mortgage loan insured by the Company by paying it off in full with the proceeds of a new mortgage that is also insured by it, the insurance on that existing mortgage is cancelled, and insurance on the new mortgage is considered to be new primary insurance written. Therefore, continuation of its coverage fr! om a refinanced loan to a new loan results in both a cancellation of insurance and new insurance written. When a lender and borrower modify a loan rather than replace it with a new one, or enter into a new loan pursuant to a loan modification program, its insurance continues without being cancelled assuming that the Company consent to the modification or new loan.
The borrower�� mortgage loan instrument requires the borrower to pay the mortgage insurance premium. There are several payment plans available to the borrower, or lender, as the case may be. Under the monthly premium plan, the borrower or lender pays it a monthly premium payment to provide only one month of coverage. Under the annual premium plan, an annual premium is paid to it in advance, and it earns and recognizes the premium over the next 12 months of coverage, with annual renewal premiums paid in advance thereafter and earned over the subsequent 12 months of coverage. Under the single premium plan, the borrower or lender pays it a single payment covering a specified term exceeding twelve months.
Pool insurance is used as an additional credit enhancement for certain secondary market mortgage transactions. Pool insurance covers the excess of the loss on a defaulted mortgage loan which exceeds the claim payment under the primary coverage, if primary insurance is required on that mortgage loan, as well as the total loss on a defaulted mortgage loan which did not require primary insurance. Pool insurance is used as an additional credit enhancement for certain secondary market mortgage transactions. Pool insurance covers the excess of the loss on a defaulted mortgage loan, which exceeds the claim payment under the primary coverage, if primary insurance is required on that mortgage loan, as well as the total loss on a defaulted mortgage loan which did not require primary insurance. In general, the loans insured by it in Wall Street bulk transactions consisted of loans with reduced underwriting documentation; cash out! refinanc! es, which exceed the standard underwriting requirements of the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively GSEs); A- loans; subprime loans, and jumbo loans.
Other Products and Services
The Company has participated in risk sharing arrangements with the GSEs and captive mortgage reinsurance arrangements with subsidiaries of certain mortgage lenders, which reinsure a portion of the risk on loans originated or serviced by the lenders, which have MGIC primary insurance. It provides information regarding captive mortgage reinsurance arrangements to the New York Department of Insurance (known as the New York Department of Financial Services), the Minnesota Department of Commerce and the Department of Housing and Urban Development, (HUD). It performs contract underwriting services for lenders, in which it judges whether the data relating to the borrower and the loan contained in the lender�� mortgage loan application file comply with the lender�� loan underwriting guidelines. It also provides an interface to submit data to the automated underwriting systems of the GSEs, which independently judge the data. These services are provided for loans, which require private mortgage insurance, as well as for loans that do not require private mortgage insurance. It provides mortgage services for the mortgage finance industry, such as portfolio retention and secondary marketing of mortgages.
The Company competes with Federal Housing Administration, Veterans Administration, PMI Mortgage Insurance Company, Genworth Mortgage Insurance Corporation, United Guaranty Residential Insurance Company, Radian Guaranty Inc., CMG Mortgage Insurance Company, and Essent Guaranty, Inc.
Advisors' Opinion:- [By Zachary Tracer]
Investors have poured cash into mortgage insurance this year as home prices rise, pushing up shares of MGIC Investment Corp. (MTG) and Radian Group Inc. (RDN) by more than 100 percent, and buying their notes in offerings. Essent Group Ltd. (ESNT), a mortgage guarantor funded amid the financial crisis by Goldman Sachs Group Inc. and billionaire George Soros, filed last month for an IPO. The companies cover losses when homeowners default and foreclosures fail to recoup costs.
- [By Dan Caplinger]
Genworth's results are consistent with the gains that its mortgage-insurance peers have experienced. Both Radian Group (NYSE: RDN ) and MGIC Investment (NYSE: MTG ) have posted impressive gains that have attracted the attention of hedge-fund investors seeking to capitalize on the strengthening housing market. Yet in the long run, the question that faces the entire industry is whether lenders will even want to make mortgage loans with inadequate down payments that require mortgage insurance in the first place. Some would argue that tighter lending standards would make mortgage insurance unnecessary, while others note that lenders might choose to demand insurance beyond the current standards of roughly 20% to 25% home equity that have historically triggered the contractual need for purchase-money insurance in mortgage contracts.
Top Financial Stocks To Own For 2014: Willis Group Holdings Limited(WSH)
Willis Group Holdings Public Limited Company provides a range of insurance brokerage, reinsurance, and risk management consulting services to its clients worldwide. The company offers various insurance brokerage services, including property damage, offshore construction, liability, and control of well and pollution insurance to the energy industry; and marine insurance and reinsurance brokerage services consisting of hull, cargo, and general marine liabilities. It also provides its services to aerospace clients, including aircraft manufacturers, air cargo handlers and shippers, airport managers, and other general aviation companies; and advisory services comprising claims recovery, contract and leasing risk management, market information, and safety services. In addition, the company offers risk management advice and brokerage services to the construction industry; brokerage for directors' and officers' insurance, as well as professional indemnity insurance for corporation s and professional firms; and specialist risk management and insurance services to fine art, diamond, and jewelry businesses, and operators of armored cars. Further, it provides special contingencies packages; services for horse racing and breeding industry, and agriculture/crop sector; and advice to companies involved in the insurance and reinsurance industry on capital markets products. Additionally, the company offers health, welfare, and human resources consulting and brokerage services to small, medium, and large corporations, as well as the employee benefits practice. It serves clients located in approximately 190 countries, including multinational and middle-market companies operating in various industries, as well as public institutions and individual clients. The company was formerly known as Willis Group Holdings Limited and changed its name to Willis Group Holdings Public Limited Company in January 2010. The company was founded in 1828 and is headquartered in Lond on, the United Kingdom.
Advisors' Opinion:- [By Jonas Elmerraji]
$11 billion UK insurer Willis Group Holdings (WSH) is another uptrending channel. The big difference with Willis is that this name is actually at its trendline support level this week. Better still, shares are bouncing higher -- and it makes sense to buy the bounce here.
Buying off a support bounce makes sense for two big reasons: It's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). Remember, all trend lines do eventually break, but by actually waiting for the bounce to happen first, you're ensuring WSH can actually still catch a bid along that line.
The 50-day moving average has been a good proxy for support on the way up, so it's a solid place to put a protective stop if you decide to be a buyer at this point.
- [By Marc Bastow]
Insurance brokerage and risk management consultant Willis Group (WSH) raised its quarterly dividend 7.1% to 30 cents per share, payable April 15 to shareholders of record as of March 31.
WSH Dividend Yield: 2.89%
Top Financial Stocks To Own For 2014: Westpac Banking Corp (WEBNF)
Westpac Banking Corporation is a banking company. It operates through three divisions: Australian Financial Services (AFS), Westpac Institutional Bank (WIB) and Westpac New Zealand. AFS consists of Westpac�� retail and business banking operations in Australia, and includes Westpac Retail & Business Banking (Westpac RBB), St.George Banking Group and BT Financial Group Australia (BFTG). Westpac RBB is responsible for sales and service for consumer, small-to-medium enterprise customers and commercial customers under the Westpac brands. St.George is responsible for sales, and service for its consumer, business and corporate customers in Australia under brands, such as St.George and BankSA. BTFG is Westpac�� Australian wealth management division. In January 2014, the Company completed the acquisition of Lloyds Banking Group Plc�� Australian asset finance business, Capital Finance Australia Limited, and its Australian corporate loan portfolio, BOS International (Australia) Ltd. Advisors' Opinion:- [By MARKETWATCH]
LOS ANGELES (MarketWatch) -- Australian stocks nudged modestly higher early Thursday, with a rebound for financials offsetting weakness in the resource space. The S&P/ASX 200 (AU:XJO) advanced 0.1% to 5,361.80, as banks and brokers gained after losing ground late in the previous session on concerns about the health of major Chinese banks. Commonwealth Bank of Australia (AU:CBA) (CBAUF) and Macquarie Group Ltd. (AU:MQG) (MCQEF) rose 0.7% apiece, Australia & New Zealand Banking Group (AU:ANZ) (ANEWF) added 0.5%, and Westpac Banking Corp. (AU:WBC) (WEBNF) improved by 0.5%. On the downside, losses for gold futures overnight sent Newcrest Mining Ltd. (AU:NCM) (NCMGF) down 1.3% and Evolution Mining Ltd. (AU:EVN) (CAHPF) 2.3% lower. The broader mining sector was also lower, with Alumina Ltd. (AU:AWC) (AWCMF) off 2.8%, BHP Billiton Ltd. (AU:BHP) (BHP) down 0.5%, and Fortescue Metals Group Ltd. (AU:FMG) (FSUMF)
- [By MARKETWATCH]
LOS ANGELES (MarketWatch) -- Australian stocks edged lower Thursday, as a mostly soft lead from the U.S. markets helped weigh on the S&P/ASX 200 (AU:XJO) , which lost 0.2% to 5,306.40. Mining stocks moved mostly lower as a rising dollar depressed some key commodity prices overnight, with Oz Minerals Ltd. (AU:OZL) (OZMLF) down 1%, Fortescue Metals Group Ltd. (AU:FMG) (FSUMF) off 1.5%, and Newcrest Mining Ltd. (AU:NCM) (NCMGF) 1.1% lower. The big four banks all started lower as well, with Australia & New Zealand Banking Group (AU:ANZ) (ANEWF) and Commonwealth Bank of Australia (AU:CBA) (CBAUF) down 0.2% each, while National Australia Bank Ltd. (AU:NAB) (NAUBF) lost 0.4%, and Westpac Banking Corp. (AU:WBC) (WEBNF) fell 0.5%. Retailers were mixed ahead of retail-sales data due out later in the day, as Harvey Norman Holdings Ltd. (AU:HVN) (HNORY) fell 0.5% and Myer Holdings Ltd. (AU:MYR) lost 0.7%, while David Jones Ltd.
Top Financial Stocks To Own For 2014: Nuveen Diversified Commodity Fund (CFD)
Nuveen Diversified Commodity Fund (the Fund) is an actively-managed, exchange-traded commodity pool. The Fund�� investment objective is to generate higher risk-adjusted total return than commodity market benchmarks, specifically the Dow Jones-UBS Commodity Index (DJ-UBSCI) and the S&P GSCI Commodity Index (GSCI), and passively managed commodity funds. The Fund will invest all of its assets in a diversified portfolio of commodity futures and forward contracts pursuant to Tangible Asset Program (TAP), an actively managed, collateralized, long-only, rules-based commodity investment strategy. TAP is designed to maintain consistent, collateralized exposure to commodities as an asset class. The Fund�� manager is Nuveen Commodities Asset Management, LLC. Gresham Investment Management LLC is the commodity subadvisor of the Fund. Wilmington Trust Company is the Trustee of the Fund. Advisors' Opinion:- [By Monica Wolfe]
Nuveen Diversified Commodity Fund (CFD)
Over the past week there were two insiders making buys into Nuveen Diversified Commodity Fund.� These insiders are Vice President William Adams and Independent Committee Member Harry Short, and they made their buys as the price has fallen to a record low.
Top Financial Stocks To Own For 2014: Zions Bancorporation(ZION)
Zions Bancorporation, a multi bank holding company, provides various banking and related products and services in the United States. The company offers community banking services, including small and medium-sized business and corporate banking; commercial and residential development, construction, and term lending; retail banking; treasury cash management and related products and services; residential mortgage; trust and wealth management; and investment activities. It also provides personal banking services to individuals, including home mortgages, bankcard, installment loans, home equity lines of credit, checking accounts, savings accounts, time certificates, safe deposit facilities, direct deposits, and automated teller machine access. In addition, the company offers small business administration lending services; secondary market agricultural real estate mortgage loans; municipal finance advisory and underwriting services; and wealth management and online brokerage ser vices. As of December 31, 2010, Zions Bancorporation offered its banking services through 495 branches in Utah, California, Texas, Arizona, Nevada, Colorado, Idaho, Washington, Oregon, and New Mexico. The company was founded in 1873 and is headquartered in Salt Lake City, Utah.
Advisors' Opinion:- [By Robert Eberhard]
Zions Bancorp's (NASDAQ: ZION) first quarter earnings of $0.48 per share�were good enough to push the stock up just over 2% in early trading this morning, but that earnings tally is in the past. What's really important about Zions' release was what it says about the future, and I think that investors have three reasons it is now an even better buy than it was before.
- [By Rich Duprey]
Zions Bancorp� (NASDAQ: ZION ) , a collection of eight banks in certain western states of the U.S.,�announced yesterday�its second-quarter dividend of $0.1717�per share on its 5.75% Series H preferred stock that trades on the NYSE under the symbol ZB.PRH.�
- [By John Maxfield]
Lest there be any doubt about the magnitude of implications for the banking sector from rising long-term interest rates, Fitzpatrick went on to note a number of startling predictions. First, the full percentage-point jump in rates has already eroded $31 billion in accounting gains from the nation's largest banks. And second, according to estimates from regional bank Zions Bancorp (NASDAQ: ZION ) , if these rates increase by three percentage points, the capital held by the industry would decline by a staggering $200 billion, reducing lending capacity by an estimated $2 trillion.
- [By Eric Volkman]
Zions Bancorporation (NASDAQ: ZION ) is continuing to dispense shareholder payouts from its till. The company has declared its latest set of dividends, most prominently a $0.04 per share of common stock payout to be distributed on Aug. 29 to holders of record as of Aug. 22. That amount matches the company's previous distribution, which was dispensed in late May. Before that, Zions paid $0.01 per share.
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