Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of mortgage insurer Radian Group (NYSE: RDN) spiked as much as 16% in intraday trading on heavier-than-average volume.

So what: Radian, along with fellow mortgage insurers like MGIC Investment (NYSE: MTG) and Genworth Financial (NYSE: GNW), was in rally mode thanks to the government's proposal to reduce the role of government-backed entities in the mortgage market. The plan would wind down the government-controlled Fannie Mae and Freddie Mac while increasing the insurance premiums charged by the Federal Housing Administration. Both actions would push more business in the direction of the private mortgage insurers, something that they're in desperate need of as they try to rebuild their businesses after the housing meltdown.

Now what: If this proposal is carried through, it will likely be a big positive for Radian and its ilk. At the same time, the worry might be that any further disruption this causes in the housing market could offset some of the benefit.

The overall picture for this group still is far from rosy though. Through earnings reports we heard that most of these insurers are drawing a blank when it comes to when their mortgage insurance operations will be profitable again. In the quest to get back in the black, slashing the government's role in housing would help, but it won't be a quick cure-all.

Want to keep up to date on these companies? Add Radian, MGIC, and Genworth to your watchlist.

Fool contributor Matt Koppenheffer owns shares of Genworth Financial but does not own shares of any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.