NEW YORK ( TheStreet) -- MGIC Investment Corp. ( MTG), a Milwaukee, Wis.-based mortgage insurer, saw shares jump 12.39% Monday to close at $1.27 on volumes of 9.7 million shares compared to average daily volumes of 5.5 million shares over the past three months. MGIC shares have rebounded in recent days after losing 64% of their value Aug. 2 following what FBR Capital Markets analyst Steve Stelmach referred to in an Aug. 3 downgrade of the company as an "unexpectedly large" second quarter loss. Stelmach dropped his recommendation to "market perform" from "outperform" in that report. Shares have nearly doubled, however, since hitting a 52-week low of $0.66 on Aug. 3. Stelmach argued in the note accompanying his downgrade that the negative earnings surprise from MGIC added to questions over "the lack of visibility on a number of persistent regulatory and legal issues facing MGIC." His previous bullish view on the company was based on a notion that MGIC was stronger than other publicly-traded competitors and that the company would slowly work its way to profitability in a relatively short period of time. The second quarter results, however, "call both of those pillars into question," he wrote. Despite that disappointment, an Aug. 8 report from Credit Suisse noted decreasing defaults from MGIC in July and a $200 million increase in new insurance written , raising the total to $2.4 billion--an almost 85% increase since February. Credit Suisse has a "neutral" rating and a $2 price target. MGIC competitor Radian Group ( RDN) also saw shares rise Monday--by 3.55% to $3.21. While Radian's volumes were just slightly above average, most stocks traded well below average volumes since trading activity tends to be light in mid-August. Both MGIC and Radian would benefit from a housing recovery, hopes for which were recently bolstered when Fannie Mae ( FNMA)and Freddie Mac ( FMCC) both posted second quarter profits. Indeed, both government sponsored entities have seen increased prices and volumes for their shares since they released their earnings. Freddie Mac shares gained 2.61% Monday to close at above 29 cents, while Fannie Mae shares rose 6.4% to 30 cents. Still, in order for those shares to have any value, the preferred shares, which ceased paying dividends in 2008 and trade for just a fraction of their original value, would have to be fully repaid.