Private mortgage insurers struggle after US debt downgrade
Private mortgage insurers felt the sting of market uncertainty Monday with Radian and MGIC Corp. falling as much as 20% in morning trading.
The PMI Group ($0.00 0%) experienced a jump of more than 15%, but that's after plummeting more than 50% late last week after a downgrade from Standard & Poor's left investors with the chance to pick up stock on the cheap with shares trading as low as 25 cents per share.
PMI fared the worst among mortgage insurers after the company voluntarily reported last week that it's not in compliance with its key state regulator and may at some point be forced to stop writing new business.
Still, mortgage insurers, which were already subjected to concerns over long-term liquidity and their role in the future mortgage finance market, are feeling the impact of the volatile stock market, which continues to worry investors, suggesting a needed recovery in housing to jump-start the mortgage finance market is not in the nation's immediate sights.
Radian Group ($12.90 0%) fell more than 20% Monday morning before retrenching somewhat. By mid-day shares were down significantly, with the stock in the $2.22 cent-per-share range.
MGIC ($6.44 0%) plummeted more than 25%, reeling from market volatility, falling well under $3 per share.
Old Republic ($13.19 0%) fell 3% Monday morning, trading a little over $9 per share.
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