Shares of mortgage insurers rose Tuesday after the Treasury said it plans to do more to help the mortgage industry and a major hedge fund revealed it increased stakes in two insurers.
The Treasury Department held a conference on Tuesday with banking executives to hash out ideas about the government's role in the mortgage market. While no concrete plans for reform were set, the meeting was one of the first steps toward restructuring the beleaguered industry.
And late Monday, the New York-based hedge fund run by billionaire John Paulson reported it held 44 million shares in Hartford Financial Services Group Inc. at the end of June, up from just 12.75 million at the end of March, according to a Securities and Exchange Commission filing.
Paulson & Co. Inc. also disclosed a new five-million-share stake in PMI Mortgage Insurance Co. at the end of June.
That could be seen as a vote of confidence for an industry battered since 2007 by mounting losses from mortgage defaults. Paulson's bets on the housing market are closely watched, as he famously made billions in profits in recent years by correctly betting that the housing market would go bust. Private mortgage insurers cover potential lender losses on loans to borrowers who don't contribute a 20 percent down payment if they fall behind on payments.
New business has also declined because mortgage lenders have made it harder for borrowers to get new loans. That has led to a slowdown in new mortgage insurance premiums.
Shares of PMI jumped 42 cents, or 16 percent, to $3.02.
Genworth Mortgage Insurance Corp. stock added 13 cents to $12.16.
Radian Group Inc. shares climbed rose 42 cents, or 6.3 percent, to $7.05.
Hartford Financial rose 73 cents, or 3.6 percent, to $21.07.
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