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Radian Group posts new insurance volume highs in 3Q

Fewer loan defaults, recovering market aren’t enough to boost revenue

medical and money

Mega private mortgage insurer Radian Group (RDN) write its second-highest quarterly volume of new insurance since its inception, fueled by a robust housing market and few loan defaults.

However, the impressive new mortgage insurance written results wasn’t enough to offset the company’s quarterly loss compared with a profit a year earlier given the significant amount of loss on investments.

Radian wrote mortgage insurance of $13.7 billion in the third quarter, up from $13.4 billion in the second quarter and also up from $10.6 billion last year.

“The high-quality business written after 2008, which represents 57% of our primary risk in force, is expected to generate attractive returns and position Radian for a return to sustained profitability,” explained Radian CEO S.A. Ibrahim.

 The primary mortgage insurance delinquency rate fell 7.8% in the quarter, down from 12.6%, signaling a decline in loan defaults.

Additionally, the total number of primary delinquent loans decreased by 17% for the quarter, and also down 31% from a year earlier.

The Home Affordable Refinance Program accounted for $1.8 billion of issuance not included in Radian’s new mortgage insurance written total for the quarter. This compares to $2.4 billion from the previous quarter and $2.7 million from the prior year.

Of the $13.7 billion of new business written in the third quarter, 71% was written with monthly premiums and 29% with single premiums.

Additionally, new mortgage insurance written continued to consist of loan with ‘excellent risk characteristics.’

The mortgage insurer reported a net loss of $12.7 million for the quarter, compared with a net profit of $14.3 million from the previous year.

The results include $7.1 million of losses on investments compared with a net gain of $84.7 million from last year.

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