PHILADELPHIA, March 27, 2008 /PRNewswire via COMTEX News Network/ -- Radian Guaranty Inc., the primary
mortgage insurance subsidiary of Radian Group Inc. (NYSE: RDN), announced
today that mortgages originated under "stated income" and "stated asset"
programs will no longer be eligible for mortgage insurance. In a message to
clients this week, Radian commented, "while certain forms of alternative
documentation used to verify assets and income are appropriate with a
disciplined underwriting process, the stated programs will no longer be
insurable as a result of poor performance." This change will take effect on
April 30, 2008 for all new mortgage insurance applications.
As announced earlier this month, revisions to existing underwriting
guidelines and pricing policies will take effect on March 31, 2008. These
significant changes represent a variety of adjustments to loan-to-value,
documentation and FICO requirements, and are part of an on going process at
Radian to respond quickly to market conditions. In addition to guideline
changes, updated declining markets territories have also been posted to the
Radian website.
"These changes reflect the current market conditions and a commitment to
our business partners and shareholders to write new business that will allow
homebuyers appropriate and affordable alternatives," commented Dave Applegate,
President of Radian Guaranty. "The continued weakness in the housing market
and overall economy has created unprecedented challenges for the industry and
our clients. It is critical that we act quickly to assist our clients in
producing high quality, profitable business. Accordingly, we have tightened
guidelines and increased pricing in areas in which we continue to see
deterioration in our risk adjusted returns."
For more details on current Radian guidelines, visit http://www.radian.biz.
All statements made in this news release that address events or
developments that we expect or anticipate may occur in the future are
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and
the U.S. Private Securities Litigation Reform Act of 1995. These statements,
which include projections regarding revenues and losses as well as other
statements regarding our future financial condition, are made on the basis of
management's current views and assumptions with respect to future events.
These forward-looking statements, as well as our prospects as a whole, are
subject to risks and uncertainties, including the following: changes in
general financial and political conditions such as extended national or
regional economic recessions (or expansions), changes in housing demand or
mortgage originations, changes in housing values, population trends and
changes in household formation patterns, changes in unemployment rates,
changes or volatility in interest rates, consumer confidence, or credit
spreads; future credit market disruptions -- in particular, further
deterioration in the housing, mortgage and related credit markets, which would
negatively impact our future consolidated results of operations and, if more
severe than our current predictions, could cause our ultimate projected losses
on our existing mortgage insurance portfolio to be inaccurate; adverse changes
in the liquidity in the capital markets and the contraction of credit markets;
changes in investor perception of the strength of private mortgage insurers or
financial guaranty providers; risks faced by the businesses, municipalities or
pools of assets covered by our insurance; the loss of a customer with whom we
have a concentration of our insurance in force or the influence of large
customers; increased severity or frequency of losses associated with certain
of our products that are riskier than traditional mortgage insurance and
financial guaranty insurance policies; material changes in the persistency
rates of our mortgage insurance policies; losses associated with the aging of
our mortgage insurance portfolio; ratings actions with respect to our credit
ratings or the insurance financial-strength ratings assigned by the major
ratings agencies to our operating subsidiaries -- in particular, our ratings
that are currently under review for possible downgrade by Moody's; heightened
competition from other insurance providers, from federal and state
governmental or quasi-governmental entities such as the FHA and from
alternative products to private mortgage insurance and financial guaranty
insurance; changes in the charters or business practices of Fannie Mae and
Freddie Mac; the application of federal or state consumer, lending, insurance
and other applicable laws and regulations, or changes in these laws and
regulations or the way they are interpreted; the possibility that we may fail
to estimate accurately the likelihood, magnitude and timing of losses in
connection with establishing loss reserves for our mortgage insurance or
financial guaranty businesses or to estimate accurately the fair value amounts
of derivative financial guaranty contracts in determining gains and losses on
these contracts; changes in accounting guidance from the SEC or the Financial
Accounting Standards Board regarding income recognition and the treatment of
loss reserves in the mortgage insurance or financial guaranty industries;
vulnerability to the performance of our strategic investments; proceeds we may
receive from a sale of our interests in C-BASS or the assets of C-BASS or in
connection with the exercise of the outstanding option to purchase our
remaining interests in Sherman; legal and other limitations on the amount of
dividends that we may receive from our insurance subsidiaries; international
expansion of our mortgage insurance and financial guaranty businesses into new
markets and risks associated with our international business activities. For
more information regarding these risks and uncertainties, as well as certain
additional risks that we face, investors should refer to the risk factors
detailed in Part I, Item 1A of our annual report on Form 10-K for the year
ended December 31, 2006. We caution you not to place undue reliance on these
forward-looking statements, which are current only as of the date of this news
release. We do not intend to, and disclaim any duty or obligation to, update
or revise any forward-looking statements made in this news release to reflect
new information, future events or for any other reason.
Contact:
For Investors: Terri Williams-Perry - phone: 215 231.1486
Email: terri.williams-perry@radian.biz
For the Media: Rick Gillespie - phone: 215 231.1061
Email: rick.gillespie@radian.biz
Steve Frankel / Tim Lynch
Joele Frank, Wilkinson Brimmer Katcher
212 355.4449
SOURCE Radian Guaranty Inc.
