Mortgage-insurer Radian posts record month

Posted: August 09, 2013

Radian Group Inc., a Center City mortgage insurer, said Wednesday that July was its biggest month ever, a sign of strength in the housing market and a shift in the industry that has benefited private mortgage insurers.

The company insured $5.3 billion worth of home mortgages in July, 58 percent more than July 2013 and five times more than the low in 2010 of $959 million.

"We're really excited about reaching a point in July where we had our highest writing month of new insurance in the history of the company," said Teresa Bryce Bazemore, president of Radian Guaranty Inc., Radian's mortgage-insurance arm.

"We've been through - as has pretty much any company that's in the housing market - a very difficult period of time, lots of losses," Bazemore said.

Radian employs 615 at its Philadelphia headquarters, about the same as it did five years ago, despite years of turmoil.

Radian's shares reached a low of 98 cents in March 2009. They closed Wednesday at $14.21, unchanged from the day before.

Compounding Radian's huge housing-bubble losses on mortgages packaged into securities were market-share losses to the Federal Housing Administration, which expanded its presence in the housing market to help the economy recover.

But FHA did not charge enough for its insurance initially, Bazemore said.

"They started having to raise their prices to deal with their concerns about their insurance fund," she said. "As they started to ratchet up their price, that allowed our price to be more competitive. That's been a huge driver."

The market share of private mortgage insurance had fallen to as little as 2.8 percent at the end of 2009 or the beginning of 2010, but has since recovered to 9 percent as President Obama and other politicians have pushed to limit the federal government's role in the housing market, Bazemore said.

Another key to Radian's recovery is the gradual increase in the number of houses sold, because the firm sells more insurance on purchases than it does on refinancings. "Purchases were pretty flat for the last three or four years," she said. "We're finally starting to see an uptick in purchases in '13."


Contact Harold Brubaker at 215-854-4651 or hbrubaker@phillynews.com.

comments powered by Disqus
|
|
|
|
|