At the end of 2007, mortgage insurer MGIC had $212 billion of insurance in force. And it's not performing well: in the fourth quarter alone its claims reached $1.3 billion. The value of the entire company, according to the stock market, is about $1.4 billion, and falling - its shares are down more than 75% from their 52-week high.

In such a context, it would hardly be surprising if MGIC's customers are a little bit wary about relying on it for mortgage insurance. The only reason to buy insurance off anybody is if you're quite sure that the insurer is going to be able to pay out in the event of a claim. And given what's happening to the monolines, insurer counterparty risk is top of everybody's mind right now. Besides, people only take out mortgage insurance when they take out a mortgage, and that activity has slowed dramatically as the housing market has slumped.

But the crazy thing is that MGIC and its fellow mortgage insurers are doing brisker business than ever.