Private mortgage insurers, MGIC Investment Corp. and Radian Group came under fire from Gimme Credit financial analyst Kathy Shanley last week, following a Friday the 13th earnings warning from MGIC that led to both company's stock dipping 12% (MGIC to $48.79, Radian to $35.16). In its warning MGIC cited continued refinance activity as well as rising delinquencies, trends that impact the whole mortgage insurance business.

But, Shanley took issue with one aspect that impacts these two insurers in particular share - the fact that MGIC and Radian jointly own non-performing loan purchasers C-BASS and Sherman Financial LLC. With both MGIC and Radian owning 46% of each enterprise, a major unforeseen spike in delinquencies could constrict liquidity at both of the publicly traded insurers.

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