Radian Unveils Partial Claim Advance Program for Servicers

Radian Guaranty said Thursday that it had launched Radian FastAdvance, a program that provides quick, partial claims advances to residential mortgage servicers — enabling residential mortgage servicers to more easily work with distressed borrowers by modifying the terms of a loan, such as a rate reduction, or by structuring a customized repayment plan.

The move likely signals a realization by the insurer that many servicers are facing operating strains associated with a significant uptick in borrower defaults; in particular, servicers must continue to advance funds to investors even when borrowers are delinquent and/or in default. By advancing servicers some of the claims funds up front, it’s possible to alleviate at least some of that hit, said sources that spoke with Housing Wire.

“Radian is advancing funds to servicers so they can take the specific action required to keep borrowers in their homes rather than proceeding with a stressful and costly foreclosure process,” Radian said in a press statement.

Radian Guaranty Inc. also announced a partnership with Consumer Credit Counseling Service of Delaware Valley (CCCS) that will provide education, customized assistance, and a method of direct communication between borrowers and servicers using the Radian FastAdvance program.

“The combination of the Radian FastAdvance program and the partnership with the CCCS is a sign of progress in helping borrowers and servicers navigate what has been a very difficult market environment,” said Paul Fischer, Radian Guaranty’s executive vice president of loss management.

“Having such a respected, independent counseling organization available will give individual borrowers the confidence to work through their situation.”

Radian FastAdvance has been successfully piloted for several months and the company said it has received favorable reactions from the servicers who have participated in the program. “Radian FastAdvance allows the front line servicing specialist additional flexibility in providing customized assistance for the borrower in today’s challenging environment,” said Matt McCrodden, director of default administration and Option One Mortgage Company.

“One of our first cases enabled the mortgage servicer to modify an adjustable rate mortgage to a lower fixed rate,” Fischer said. “Our goal is for all mortgage servicers to make use of Radian FastAdvance so that borrowers with the desire and the ability to work through their situation are able to stay in their homes.”

For more information, visit http://www.radian.biz.

Disclosure: The author held no positions in RDN when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.