The struggling private mortgage insurance industry is more fragmented than ever, as companies grapple with elevated levels of underwater mortgages and loan delinquencies, according to one equities research firm. The Bedford Report () The PMI Group (PMI) and MGIC Investment Corp. (MTG) this week. The analysts who wrote the report are bullish on MGIC, despite the stock being down about 75% this year. The outlook stems from the company's main operating unit writing more new insurance in August, while the number of bad loans under MGIC's roof fell from July. The analysts maintain a bearish outlook for The PMI Group, which was pulled under the umbrella of the Arizona Department of Insurance last month and forced to stop writing new business. The company also faces possible delisting from the New York Stock Exchange because its stock price has traded at less than $1 for more than a month. Analysts last month suggested PMI's struggles could boost the market share of other mortgage insurers in the near-term. Private mortgage insurers represented by the Mortgage Insurance Companies of America wrote $4.9 billion in new business in July even as some companies struggled with falling stock prices and uncertainty about liquidity levels. The Bedford Report analysts report the trade group said the private mortgage insurance industry has raised more than $8 billion in new capital since the beginning of the credit crisis a few years ago, "which is a testament of investor confidence in the industry's ongoing role in the marketplace." Write to: Kerri Panchuk.