Shares of mortgage and bond insurers are seeing notable strength on Wednesday after a Mortgage Insurance Companies of America (MICA) monthly statistical report for February showed that for the first time in almost four years mortgage defaults were down sharply.
According to the report, MICA’s members reported 68,675 defaults and 80,758 so-called cures (which measure loan problems that have been resolve) in February.
Shares of Genworth Financial Inc. (GNW) climbed 5.90% to $18.48 for the biggest gain in the Standard & Poor’s 500 Index ; Radian Group (RDN) shares advanced 8.62% to $15.95 ; MGIC Investment Corp. (MTG) jumped 8.59% to $11.00 ; and shares of PMI Group Inc. (PMI) spiked nearly 30% in recent trading.
PMI on Wednesday was also the focus of a WSJ ‘Heard On The Street’ column about PMI’s principal operating subsidiary — PMAC (PMI Assurance Co.) — which received approval as a direct issuer of mortgage guaranty insurance by Freddie Mac (FRE). Pursuant to Freddie Mac’s approval, PMAC may write new mortgage insurance business in 16 states in the event that PMI Mortgage Insurance Co. cannot.
Shares of mortgage and bond insurers are continuing a rally that began last week after Bank of America (BAC), the largest U.S. mortgage lender, announced plans to cut principal owed on underwater home loans.