Friday, December 01, 2006

h&r block / hrb desaster reloaded

this data from hrb shows you that the mbs market is finally demanding higher premiums and is doing the due dilligence more seriously! and remember hrb has no option arms! in the options arm segment the picture should be even worse......more on mbs and other warnings

diese date von hrb zeigt eindeutig das der mbs markt wacht endlich auf und verlangt höhere risikoprämien und prüft die angebotenen pakete genauer. und das obwohl hrb keine der riskantesten kredite mit negativer tilgung anbietet. dort dürfte es um einiges schlimmer aussehen......... mehr zu mbs und warnungen

here the details from the warning in september./ hier die fakten zur warnung vom september

off course the stock is ways higher (in part due to the sale of anounced sale of "option one") than before the warning in september and afterhours the stock stayed at 24$ after the secound massive warning. wall street is on steroids.........the new guidance is 1,20$-1,45$ (very optimistic and off course ex massive charges!. makes a pe around 18 without charges....! with fundamentals worsening. maybe private equity can makes an offer............please.......)

selbstredend ist die aktie höher als zur letzten warnung im september (teilweise durch die ankündigung des verkaufs von "option one") und der warnung von gestern. nachbörslich weiter stabil bei 24$. wall street ist auf speed.......die neue schätzung beläuft sich auf optimistische 1,20-1,45. natürlich ohne die massiven "sonderbelastungen". macht ex restrukturiereungen ein kgv von 18. inkl. kosten wahrscheinlich eher 30-50!. und das bei sich verschlechternden fundamentals. evtl. kann ja private equity einspringen........
Mortgage Services revenues decreased to $140.6 million in the fiscal 2007 second quarter from 235.8 million (down 40%!) last year. The decrease was driven by lower originations and by a decrease in gains on sale due to lower than expected loan sale premiums and higher provisions for loan losses. The business posted a pretax loss of $39.0 million versus pretax income of $48.8 million a year ago. (looks like a desaster!!!)

Non-prime loan origination volume was $6.6 billion versus a record $12.2 billion(down 46%) in the year-ago quarter and $7.8 billion (down 15% qoq) in the first quarter of fiscal 2007, as softness in the U.S. housing market and tightened loan underwriting continued to suppress loan volume.

Net gain on sale-gross margin for Mortgage Services was 37 basis points compared with 81 basis points in the fiscal year's first quarter, reflecting losses on derivatives and lower loan sale premiums.

Loan loss provisions totaled 69 basis points in the second quarter due to continued high default rates and greater loss severity. As a result of changes in loss severity estimates, the second quarter provision includes approximately 19 basis points related to production in prior periods.

Option One's mortgage servicing portfolio was $73.0 billion at the end of the quarter

......The company incurred $12.2 million in residual asset impairments, which were recorded as a reduction in gains on sale of mortgage assets in the income statement. The company also realized a net write-up to residuals of $7.6 million in the second quarter, ......

For the first six months of fiscal 2007, revenues decreased to $310.3 million from $540.8 million in the prior year period, and a pretax loss of $44.0 million compared with pretax income of $179.5 million last year.

During the six months, the company reacquired 8.4 million shares of its common stock at a total cost of $186.6 million, or an average purchase price of $22.26 per share.(22.4 mio shares left)/ no further repurchase of shares in the 2nd. half planned!

from their webcastpresentation (pdf)

the loan to value ratio in their nonprime servicing portfolio is 82%, fico 611, 40 year accounts for 31% of their origination volume, interest only for 14% (page 8)

loan sale repurchase reserve from 0,16% in 2006 to 0,69% (plus 331%!!!!) and up from the guidance of 0,4% just given a few weeks ago. wow!!!!

75% higher than the guidance from september!!!!!!!!!!!! the mbs market is waking up!

update minyanville on hrb earnings

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