Stock Plunge Takes Mortgage Toll

Fears of a worsening credit crunch triggered a sell-off in the stock market Friday that took a heavier toll on mortgage stocks than on the market as a whole.The Dow Jones industrial average fell 281 points, or 2.1%, on the day, but 16 of the 18 mortgage stocks tracked by MortgageWire declined by higher percentages. NetBank, an online bank, and Radian Group, a mortgage insurer, led the downturn among these mortgage stocks, as NetBank's share price fell $0.05, or 18.5%, and Radian's fell $3.75, or 14.2%. Other mortgage stocks that fell more than 5% on the day were Franklin Bank, down 10.7%; LandAmerica Financial, down 9.6%; Doral Financial, down 9.1%; Triad Guaranty, down 8.8%; PMI Mortgage, down 7.7%; Delta Financial, down 7.0%; Countrywide Financial Corp., down 6.6%; IndyMac Bancorp, down 6.6%; Washington Mutual Inc., down 6.6%; and Kaufman & Broad, down 5.4%. News reports attributed the stock plunge to remarks by Bear Stearns officials saying that the mortgage-related credit crunch has led to the worst conditions in the fixed-income markets in more than two decades (see item above). As of around 1 p.m. Monday, the Dow was up by more than 90 points.