Radian Receives Approval of RMAI Subsidiary from Freddie Mac through 2013
21 Décembre 2012 - 10:00PM
Business Wire
Radian Guaranty Inc., the mortgage insurance subsidiary of
Radian Group Inc., today announced that on December 20, 2012,
Freddie Mac agreed to extend its approval of Radian Mortgage
Assurance Inc. (RMAI), a wholly owned subsidiary of Radian
Guaranty, as a limited eligible mortgage insurer for an additional
one-year period that will expire on December 31, 2013. As
previously disclosed, RMAI maintains a similar approval for the
same time period from Fannie Mae.
As of September 30, 2012, Radian Guaranty maintained a
risk-to-capital ratio of 20.1:1, which is below the 25:1
risk-to-capital limit imposed by certain states. In the event
Radian Guaranty is no longer in compliance with the risk-based
capital requirements of certain states, the company plans to write
new mortgage insurance business in those states through
state-specific waivers or similar relief, or by using RMAI. The
amended approval from Freddie Mac does not require any capital
contributions from Radian Group to Radian Guaranty or RMAI beyond
those required under the original approval. Based on the original
approval, as previously announced, Radian Group contributed $100
million to Radian Guaranty in February 2012, and is required to
contribute $50 million of additional capital to RMAI only in the
event that Radian Guaranty were to exceed the risk-based capital
requirements of those states for which a waiver or other relief has
not been obtained. RMAI currently has $19 million of existing
capital.
“Our top priority at Radian is to continue writing new,
high-quality mortgage insurance business. This helps to improve the
credit composition of our mortgage insurance book and better
position Radian for a return to operating profitability next year,”
stated Chief Executive Officer S.A. Ibrahim. “The support of our
stakeholders is critical to this effort and the extension of
Freddie Mac’s approval of RMAI is an illustration of that
support.”
In addition to the states approved under the original agreement
with Freddie Mac, the amended approval also approves RMAI to write
business in Idaho provided that Radian Guaranty continues its
efforts to obtain a waiver approval or denial from Idaho state
insurance regulators. Further, the amended approval requires Radian
Guaranty to diligently pursue an extension of existing waivers
beyond their current expiration dates, including those waivers in
California, Florida, Illinois and New Jersey that expire as of the
end of 2012. The company has submitted requests in each of these
states for an extension of the existing waivers. To the extent that
any such extension is not granted, Radian Guaranty is required to
seek further modification of the amended approval to allow the
company to use RMAI in such states.
The amended approval with Freddie Mac includes an additional
condition related to the time-frame by which Radian Guaranty
evaluates and internally resolves claims. Specifically, the amended
approval provides that: (1) within 120 days of the amended
approval, Radian Guaranty will pay to Freddie Mac or otherwise
resolve internally (e.g., through loss mitigation actions such as
rescission or denial) a majority of all claims outstanding greater
than 90 days; and (2) going forward, a majority of claims must be
paid or otherwise resolved internally (e.g., through loss
mitigation actions such as rescission or denial) within 90 days of
the date the claims are perfected. The terms and conditions of the
amended approval may be found on the Form 8-K filed by Radian Group
Inc. with the SEC today and the original approval may be found as
Exhibit 10.66 to Radian Group Inc.’s Annual Report on Form 10-K for
the year ended December 31, 2011. As was the case with the original
approval, Freddie Mac, in its sole discretion, may modify the terms
and conditions of the amended approval or withdraw it.
About Radian
Radian Group Inc. (NYSE: RDN), headquartered in Philadelphia,
provides private mortgage insurance and related risk mitigation
products and services to mortgage lenders nationwide through its
principal operating subsidiary, Radian Guaranty Inc. These services
help promote and preserve homeownership opportunities for
homebuyers, while protecting lenders from default-related losses on
residential first mortgages and facilitating the sale of
low-downpayment mortgages in the secondary market.
Forward-looking Statements
Some of the statements in this press release may constitute
“forward-looking statements” within the meaning of the United
States Private Securities Litigation Reform Act of 1995. These
statements are based on our current expectations, estimates and
projections. Words such as "will," "expects," "believes" and
similar expressions are used to identify these forward-looking
statements. These statements are only predictions and as such are
not guarantees of future performance and involve risks,
uncertainties and assumptions that are difficult to predict.
Forward-looking statements are based upon assumptions as to future
events or our future financial performance that may not prove to be
accurate. Actual outcomes and results may differ materially from
what is expressed or forecast in these forward-looking statements.
As a result, these statements speak only as of the date they were
made, and we undertake no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise. For more information
regarding these risks and uncertainties as well as certain
additional risks that we face, you should refer to the Risk Factors
detailed in Item 1A of Part I of our Annual Report on Form 10-K for
the year ended December 31, 2011, Item 1A of Part II of our
Quarterly Reports on Form 10-Q filed in 2012, and subsequent
reports and registration statements filed from time to time with
the Securities and Exchange Commission.
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