Mortgage insurance stocks roiled by jittery market
The stock value of major mortgage insurers plummeted with the Dow Jones Thursday, with The PMI Group (PMI) dropping more than 50%. Mortgage insurers fell alongside the Dow as it experienced a 500-point free fall after the financial markets expressed fears tied to general economic weakness in the United States and spreading debt concerns in Europe. The PMI Group's 50% plunge pushed the company's stock in the 40 cent-per-share range at close, down from 88 cents per share at close a day earlier. PMI investors were riled not only by weak indicators in the overall economy, but by the company's own earnings statement, which warned the firm may have to stop writing new business if it fails to reach a deal with the insurer's primary regulator, the Arizona Department of Insurance. To date, PMI is not in full compliance with the regulator's capital requirements and could be forced to suspend the writing of new business if the situation is not resolved, PMI disclosed. Fellow mortgage insurer, MGIC Investment Corp. (MTG) saw its stock plummet 20% during Thursday afternoon trading. Genworth Financial (GNW), meanwhile, faired better. Other mortgage industry stocks also suffered on the day. Write to Kerri Panchuk.