We have been just as guilty as the other guys in reporting the gloom and doom, but there are some shining lights in the real estate world right now. The top performing stock for July, 2007 on the S&P 500 was a mortgage company. Hudson City Bancorp was up 21 percent for the month while the mortgage industry imploded. How is that possible?

Well, Hudson City was the tortoise. Instead of writing bad loans and chasing risky business, the company just plodded along making solid loans to solid borrowers, and now while their competitors are falling apart, Hudson City is the darling of Wall Street. So maybe it is not a credit crisis, but instead an awakening to bad business practices and stopping them.

New Jersey-based Hudson City Bancorp, whose main line of business is making traditional mortgage loans, albeit big ones, has more than just weathered the subprime storm. Its stock has jumped 21 percent since the market peaked in July, while competitors like Countrywide (up $1.98 to $21.79), the nation’s largest mortgage lender, have tumbled on concerns about rising delinquencies on subprime mortgages that sparked a broader credit crunch in markets around the world.
For much of the past five years, Hudson’s stock growth lagged that of its larger, more diversified rival, but all that changed in July when the credit crunch, well, crunched.
“If we compare this to the Titanic going down, then Hudson City is the lifeboat for some of these mortgage broker firms,” said James Abbott, an analyst with the investment bank Friedman, Billings, Ramsey & Co (FBR). “A lot of small mom-and-pop mortgage brokers are looking for places to send their business, and Hudson is one of the few appealing options right now.” via CNN Money

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