Radian Guaranty Inc. Eliminates 'Stated Income' and 'Stated Asset' Programs
27 Mars 2008 - 10:00PM
PR Newswire (US)
PHILADELPHIA, March 27 /PRNewswire/ -- Radian Guaranty Inc., the
primary mortgage insurance subsidiary of Radian Group Inc.
(NYSE:RDN), announced today that mortgages originated under "stated
income" and "stated asset" programs will no longer be eligible for
mortgage insurance. In a message to clients this week, Radian
commented, "while certain forms of alternative documentation used
to verify assets and income are appropriate with a disciplined
underwriting process, the stated programs will no longer be
insurable as a result of poor performance." This change will take
effect on April 30, 2008 for all new mortgage insurance
applications. As announced earlier this month, revisions to
existing underwriting guidelines and pricing policies will take
effect on March 31, 2008. These significant changes represent a
variety of adjustments to loan-to-value, documentation and FICO
requirements, and are part of an on going process at Radian to
respond quickly to market conditions. In addition to guideline
changes, updated declining markets territories have also been
posted to the Radian website. "These changes reflect the current
market conditions and a commitment to our business partners and
shareholders to write new business that will allow homebuyers
appropriate and affordable alternatives," commented Dave Applegate,
President of Radian Guaranty. "The continued weakness in the
housing market and overall economy has created unprecedented
challenges for the industry and our clients. It is critical that we
act quickly to assist our clients in producing high quality,
profitable business. Accordingly, we have tightened guidelines and
increased pricing in areas in which we continue to see
deterioration in our risk adjusted returns." For more details on
current Radian guidelines, visit http://www.radian.biz/. All
statements made in this news release that address events or
developments that we expect or anticipate may occur in the future
are "forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933, Section 21E of the Securities
Exchange Act of 1934 and the U.S. Private Securities Litigation
Reform Act of 1995. These statements, which include projections
regarding revenues and losses as well as other statements regarding
our future financial condition, are made on the basis of
management's current views and assumptions with respect to future
events. These forward-looking statements, as well as our prospects
as a whole, are subject to risks and uncertainties, including the
following: changes in general financial and political conditions
such as extended national or regional economic recessions (or
expansions), changes in housing demand or mortgage originations,
changes in housing values, population trends and changes in
household formation patterns, changes in unemployment rates,
changes or volatility in interest rates, consumer confidence, or
credit spreads; future credit market disruptions -- in particular,
further deterioration in the housing, mortgage and related credit
markets, which would negatively impact our future consolidated
results of operations and, if more severe than our current
predictions, could cause our ultimate projected losses on our
existing mortgage insurance portfolio to be inaccurate; adverse
changes in the liquidity in the capital markets and the contraction
of credit markets; changes in investor perception of the strength
of private mortgage insurers or financial guaranty providers; risks
faced by the businesses, municipalities or pools of assets covered
by our insurance; the loss of a customer with whom we have a
concentration of our insurance in force or the influence of large
customers; increased severity or frequency of losses associated
with certain of our products that are riskier than traditional
mortgage insurance and financial guaranty insurance policies;
material changes in the persistency rates of our mortgage insurance
policies; losses associated with the aging of our mortgage
insurance portfolio; ratings actions with respect to our credit
ratings or the insurance financial-strength ratings assigned by the
major ratings agencies to our operating subsidiaries -- in
particular, our ratings that are currently under review for
possible downgrade by Moody's; heightened competition from other
insurance providers, from federal and state governmental or
quasi-governmental entities such as the FHA and from alternative
products to private mortgage insurance and financial guaranty
insurance; changes in the charters or business practices of Fannie
Mae and Freddie Mac; the application of federal or state consumer,
lending, insurance and other applicable laws and regulations, or
changes in these laws and regulations or the way they are
interpreted; the possibility that we may fail to estimate
accurately the likelihood, magnitude and timing of losses in
connection with establishing loss reserves for our mortgage
insurance or financial guaranty businesses or to estimate
accurately the fair value amounts of derivative financial guaranty
contracts in determining gains and losses on these contracts;
changes in accounting guidance from the SEC or the Financial
Accounting Standards Board regarding income recognition and the
treatment of loss reserves in the mortgage insurance or financial
guaranty industries; vulnerability to the performance of our
strategic investments; proceeds we may receive from a sale of our
interests in C-BASS or the assets of C-BASS or in connection with
the exercise of the outstanding option to purchase our remaining
interests in Sherman; legal and other limitations on the amount of
dividends that we may receive from our insurance subsidiaries;
international expansion of our mortgage insurance and financial
guaranty businesses into new markets and risks associated with our
international business activities. For more information regarding
these risks and uncertainties, as well as certain additional risks
that we face, investors should refer to the risk factors detailed
in Part I, Item 1A of our annual report on Form 10-K for the year
ended December 31, 2006. We caution you not to place undue reliance
on these forward-looking statements, which are current only as of
the date of this news release. We do not intend to, and disclaim
any duty or obligation to, update or revise any forward-looking
statements made in this news release to reflect new information,
future events or for any other reason. Contact: For Investors:
Terri Williams-Perry - phone: 215 231.1486 Email: For the Media:
Rick Gillespie - phone: 215 231.1061 Email: Steve Frankel / Tim
Lynch Joele Frank, Wilkinson Brimmer Katcher 212 355.4449
DATASOURCE: Radian Guaranty Inc. CONTACT: For Investors, Terri
Williams-Perry, +1-215-231-1486, , or For the Media, Rick
Gillespie, +1-215-231-1061, , both of Radian; or Steve Frankel, or
Tim Lynch, both of Joele Frank, Wilkinson Brimmer Katcher for
Radian, +1-212-355-4449 Web site: http://www.radian.biz/
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