ORI's mortgage obligations are in runoff whereas its insurance lines are generating new sales and renewals. Those new sales and renewals are not related to its mortgage insurance division.
Once it's apparent that its strategy is working, the stock price will move. They don't have to eliminate all their obligations, it just has to be clear that they are going away. That should happen no later than 2013.
I have no interest in Fannie or Freddie. Different business models.
The mortgage insurance runoff is projected to be cash flow positive:
"As we continue to look at our expectations for the Mortgage Guaranty book as it runs off over its life, our standard premium deficiency model, which we talk about quarterly, continues to show that, that book of business should run-off positively over its remaining life."
Since it has a very negative cash flow from it today, when that turns, it won't just end the drag on cash flow - it will add to it. And the other lines are already profitable.
IMO the company is out of the woods in terms of whether or not it will return to sustained profitability. It's on track to do so. And in the meantime, the dividend looks safe. I think it's a great stock for patient, long-term investors.