Analysts at Sanford C. Bernstein & Co., New York, have downgraded their ratings on Freddie Mac, Radian Guaranty, and PMI Group.All three are now rated "market perform" instead of "outperform." Analysts Jonathan Gray and Adam Weinrich added that, "There are few mortgage finance stocks that we remain very interested in owning" in a recent report, citing political and economic pressures that might hurt the stocks. The downgrade of Freddie Mac reflects the stock's price, the analysts said. Fannie Mae remains rated "outperform" with a "moderate 20% upside." The analysts also are not keen on the mortgage insurance sector, saying that business growth will be unexciting and that possible home price declines "would terrify investors and damage relative valuations for the MIs."

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