Mortgage insurer Radian Group (RDN) swung to a first-quarter net loss of $169.2 million, or $1.28 per share, as the company felt the sting from losses on changing derivative values and other structured finance instruments.

The 1Q net loss compares to a net profit of $103 million, or 77 cents a share, for the prior-year quarter. 

Still, the firm experienced some successes, writing $6.5 billion in new mortgage insurance business for the period ended March 31. It also moved to a lower 20.6-to-1 risk-to-capital ratio position after entering into a reinsurance contract with insurer Assured Guaranty.

Radian entered into the Assured Guaranty reinsurance contract, spreading its risk, thereby lifting the firm’s statutory capital by $94 million.

After the transaction, Radian’s risk-to-capital ratio fell below the 21.5-to-5 ratio reported in December.

Delinquent mortgages insured by the firm also declined. The company’s  set aside for mortgage insurance losses declined from $333.3 million in the fourth quarter of 2011 and $414 million in the year-ago period to $234.7 million in the first quarter. The total number of delinquent loans  fell by 7% from the fourth quarter and 12% from the year-ago period.

Total mortgage insurance claims also declined from $365.2 million a year ago to $218.2 million in 1Q.

Radian, which is required to meet the capital ratio guidelines of numerous state insurance regulators, noted it has received six state-specific waivers on risk capital requirements, allowing it to operate in some of those states undeterred.

In addition, Fannie Mae and Freddie Mac gave Radian permission in 1Q to write new business in risk-based capital states where waivers have yet to be obtained. 

Most Popular Articles

HomeStreet Bank fined for kickbacks to real estate agents, homebuilders

The FDIC announced Wednesday that it reached a settlement with HomeStreet Bank after an investigation found that HomeStreet had paid kickbacks to real estate agents and homebuilders in exchange for their mortgage business.

Nov 06, 2019 By

Latest Articles

Black Knight: Early-stage delinquencies heighten among purchase loans

While purchasing demand may be improving, data from Black Knight indicates that origination performance is weakening as the company determined that early-stage delinquencies have been steadily increasing over the past 24 months.

Nov 11, 2019 By