First National Financial (FNF) Seems To Be Turning The Corner

By: TraderMark Wednesday, February 04, 2009 6:00 PM

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I've been looking at ways to play the "impending" housing recovery without touching housing related retailers or home builders. One such name is Ocwen Financial (OCN) which we discussed yesterday (Feb 3: Freddie Mac to Outsource Delinquent Collections -Ocwen Financial Chosen to Start). I also mentioned the title insurer stocks in late December (Dec 26: Ways to Play the Housing Boom - Title Insurers)

I have been struggling to find ways to play the refinance "boom" outside of Bankrate.com (RATE) which we mentioned December 3rd (Dec 3: Mortgage Applications Spike to Record) While I believe purchases of homes (ex - foreclosures) will continue to disappoint bulls, along with the % of refinance applications actually being approved - 5%, 4.5% and potentially even lower interest rates that the government will eventually take us to are going to have some effects. Foreclosure are now close to 1 in 2 sales in the entire country so at 50%+ listed price some volume of sales should occur.

These names have been on our "watch list" ever since (Jan 11: Playbook for the Week) and today the first of the "Big 3" reported. Recent trends are enticing and with my belief that Obama & Co are going to throw the kitchen sink at attempts to get people to buy houses - this is a way to play that without counting on "new homes" as you would by buying a homebuilder. My thesis is that sales will begin to pick up in the housing market, because half of all sales are now "distressed". Bulls will misread this as a "return to good times" - it won't be. It will be fire sales...

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