Triad Nearing Deal to Put Existing MI Portfolio into Runoff
Triad Guaranty Inc. (TGIC) said Friday that despite a recent ratings downgrade, it continues to write new mortgage insurance business, and that its qualification with both Fannie Mae and Freddie Mac remains intact. Triad had seen a key insurer financial strength rating tied to its primary insurance subsidiary, Triad Guaranty Insurance Corporation, downgraded by Fitch from ‘AA-’ to ‘BBB-' roughly two weeks ago. The AA- minus rating level is generally considered the minimum to remain qualified to work with both GSEs, but both Fannie and Freddie have said they're looking to work with the insurers rather than force the issue. Both GSEs would stand to record substantial losses otherwise, say sources that spoke with Housing Wire last week. "The GSEs are supporting Triad," said Mark Tonnesen, president and CEO at Triad. "There is no change in our status as a qualified mortgage insurer." Tonneson also said that negotiations with a key investor were progressing, and that should a deal be reached, Triad would put its existing MI portfolio into voluntary run-off while it reinvents itself as a separate company. "These are trying times for our company," he said. "Although we face significant challenges, we remain committed to all key stakeholders as we attempt to complete this transaction." For more information, visit http://www.triadguaranty.com. Disclosure: The author held no positions in TGIC when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.