The mortgage crisis has certainly taken its toll on the mortgage insurance industry, and, despite some bright spots, these companies continue to struggle. Some recent lawsuit settlement news may bring some cheer, however, as it just might signal a turning of the tide in favor of insurers battling banks over toxic mortgage loans.
Plenty of grist for the lawsuit mill
Bank of America
Bank of America, which faces boatloads of suits alleging fraud in mortgages written by its 2008 acquisition, is also embroiled in litigation with MBIA
While still in uphill-battle mode, these companies are beginning to show signs of life. Radian recently noted that it had doubled the number of insurance policies written in Q2 from a year ago, and troubled MGIC Investment reported writing $2.2 billion in new policies for June. Genworth Financial
Although the legal wins and current refinance boom are great news for the industry, what is really needed to pull these companies out of the doldrums is a true recovery in housing. The evidence finally seems to point to an end to the housing bust, as conventional indicators such as housing sales and prices seem to be finally trending upward. New mortgages, rather than rewritten underwater loans, will be the lifeblood the industry needs to get back on its feet. In the meantime, insurers will take their wins where they can find them.
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Fool contributor Amanda Alix owns no shares in the companies mentioned above. The Motley Fool owns shares of Bank of America. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.