FBR Capital Markets analyst Ed Mills noted in a report last week that both an announcement from the Treasury Dept. and an accompanying statement from FHFA regarding the accelerated wind-down of Fannie Mae and Freddie Mac cited the FHFA's February proposal. He saw those citations as a bullish sign for private mortgage insurers.
KBW's George believes it is likely to be at least a year before any the government formalizes any rule creating a bigger role for mortgage insurers. In the meantime, unwelcome surprises in the legacy books of the publicly-traded mortgage insurers could send their shares down sharply. For those willing to be patient and with a high tolerance for risk, however, the payoff looks to be substantial.
-- Written by Dan Freed in New York.
Follow this writer on Twitter.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV