RDN Radian Group Inc

Radian's SplitEdge(SM) Enables Homebuilders to Reduce Homebuyers' Monthly Mortgage Insurance Payments PHILADELPHIA, July 25 /PRNewswire-FirstCall/ -- Homebuilders looking for ways to grow their businesses and strengthen customer relationships can now turn to SplitEdge(SM), a new product from Radian Guaranty Inc. that lets homebuilders reduce a homebuyer's monthly mortgage insurance (MI) payment. Traditionally, homebuyers with less than a 20% downpayment purchase mortgage insurance in order to secure a mortgage loan. The homebuyer typically pays for the insurance through monthly installments. With SplitEdge, homebuilders can provide homebuyers with a one-time, refundable upfront MI payment -- which can be .75%, 1.00%, or 1.25% of the total mortgage loan -- that significantly lowers the monthly MI installments that the homebuyer must pay. In today's increasingly competitive new-housing market, homebuilders are using a number of strategies to gain customers, including discounts, upgrades, amenities, and a host of other concessions. SplitEdge gives homebuilders another concession for homebuyers, one that provides financial value for months or years. Also, by making mortgage insurance a more-affordable way to get a mortgage, SplitEdge represents a less-expensive alternative to other solutions such as piggyback loans. "SplitEdge reflects Radian's continued commitment to bring innovative, valuable products and solutions to the nation's housing market," said Doug Rossbach, Radian's senior vice president, Strategic Initiatives. "For homebuyers, this creative mortgage insurance product eliminates the potential risk of balloon payments associated with other mortgage loan options such as 80-10-10s and 80-20s, known as piggyback loans. We're also helping borrowers save money on the interest paid over the life of a piggyback. By sharing the MI cost, homebuilders can help homebuyers get the house they really want." SplitEdge meets the needs of homebuyers who are purchasing new construction, have a zero to low downpayment, have average or above-average credit, and who are looking for ways to lower their monthly payments. For example, assuming a home sale price of $254,756 with a 5% downpayment, a 6% rate, and 1% upfront MI premium payment, a homebuyer can lower the monthly MI payment to $44 from $157 when compared with traditional borrower-paid mortgage insurance. In addition to enabling homebuyers to make lower monthly MI payments, SplitEdge can help them qualify for larger loan amounts and, therefore, higher value homes. Although the product initially caters to the business needs of homebuilders, SplitEdge allows any approved third party -- including lenders, credit unions, homebuilders, even family members -- to provide the upfront payment toward the MI premium. "The upfront payment can come in the form of concessions from almost anyone involved in the homebuying process," said Rossbach. "It can be incorporated into the overall MI balance to lower the homebuyer's monthly MI payment or to help them qualify for a higher-value home. It's a product that's designed with the needs of a dynamic housing market in mind." About Radian Guaranty Inc. Radian Guaranty Inc. is the mortgage insurance subsidiary of Radian Group Inc. (NYSE:RDN), a global credit enhancement company headquartered in Philadelphia. Radian Guaranty provides risk management products and services to mortgage lenders nationwide; these services increase opportunities for people to buy homes with little or no downpayment, protect lenders from default-related losses on residential first mortgages and facilitate the sale of low-downpayment mortgages in the secondary market. Additional information may be found at http://www.radian.biz/. DATASOURCE: Radian Guaranty Inc. CONTACT: For investors: Mona Zeehandelaar, +1-215-231-1674, email: ; or for the media: David Cheung, +1-215-231-1362, email: , both of Radian Guaranty Inc. Web site: http://www.radian.biz/

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