- The stocks of mortgage insurance companies MGIC, Radian, Essent, and National Mortgage are trading as if a mortgage default disaster is right around the corner.
- I've been arguing that is unlikely because of a housing shortage and more than a decade of conservative mortgage lending practices.
- Now I have a third reason - the Federal Reserve's frantic money printing. A healthy portion of that new money is ending up as housing inflation.
- Even after tripling from their year-ago bottoms, the stocks remain cheap, selling at 16% cash flow yields and below liquidation value.
For further details see:
The Fed's Money Printing Bonanza Makes Me Like The Mortgage Insurers Even More