Mortgage Industry Gets a Boost

Washington Federal Inc. (WFSL - Analyst Report) may well be bracing for its first-ever quarterly loss, but on Tuesday, mortgage investment stocks are proving to be trailblazers with the industry gaining 5.16%. While CBRE Realty Finance, Inc. (CBF) leads the pack with an intraday gain of 12.62% till noon, Hatteras Financial Corp. (HTS - Snapshot Report) is doing pretty well for itself with 3.86%.

But things are not all hunky dory. According to an AP report on Tuesday, home prices across the U.S. tumbled by a record 5.3% compared with a year ago. The Federal Housing Finance Agency pointed out that prices were lower by 0.6% from June on a seasonally adjusted basis. To make matters worse, the prices have now plunged to October 2005 levels.

AP also reported on Tuesday that Federal Deposit Insurance Corp. chairman Sheila Bair has called for the inclusion of the restructuring of troubled mortgages in the final financial bailout package. She said this will help stabilize the housing and financial markets.