Private MI Shares Slide on News of FHA Premium Cut

Private mortgage insurance stocks tumbled Wednesday amid news that President Obama is expected to announce cuts to the Federal Housing Administration's annual premiums.

The president is expected to announce in a housing policy speech Thursday a half-point point cut to fees that FHA charges to guarantee mortgages.

Department of Housing and Urban Development Secretary Julian Castro confirmed the reduction — which was first reported by Bloomberg — in a statement late Wednesday.

"By bringing our premiums down, we're helping folks lift themselves up so they can open new doors of opportunity and strengthen their financial futures," Castro said in the statement.

Essent shares plunged 7% from the previous close, to $23.50. Radian and National MI shares both fell by roughly 4%, to $15.85 and $8.34, respectively.

MGIC shares dropped 2.8%, to $8.72, while Genworth fell 2.6%, to $7.83.

Separately, Radian said in a press release that its delinquent inventory declined by approximately 1% in December, to 45,319 loans, compared to the previous month.

Radian also said that it wrote $3.43 billion in primary new insurance, a 20% increase from a month earlier.