With the Dow Jones in a steep selloff Thursday afternoon, mortgage insurance stocks took it on the chin, reacting to poor earnings from MI giant The PMI Group.
The only good news for the mortgage sector: rates are falling with hope of yet another mini refi boom on the way.
PMI, in particular, lost half its value, falling 54% to $0.40 per share, after reporting a $135 million loss in 2Q. (
PMI also dragged down both Radian and MGIC by 16% each from Wednesday's close. Genworth Financial and Old Republic were down 6% and 2%, respectively.
Many MIs are suffering because of poor risk-to-capital issues tied to “legacy” loan issues.
Meanwhile, the nation's megabanks – which also control a large chunk of the residential and servicing sectors – fell as well, but not as steeply. Bank of America's share price was down 4% in the afternoon with Wells Fargo and JPMorgan Chase down 3% each.
PHH Corp., the largest publicly traded nonbank lender, was down 2%, and PennyMac, a publicly traded nonperforming loan investor and correspondent mortgage buyer was up 3%, the latter on strong earnings.
