Radian Forecasts Claims on 14 Percent of Mortgages

Philadelphia Inquirer (08/12/08); Brubaker, Harold
After another quarter of falling house prices, rising default rates and credit-market turmoil affecting all mortgage insurers, Radian Group Inc. expects to face claims on 14 percent of the first mortgages it has insured. The bleak outlook has compelled the Philadelphia-based mortgage insurer to allocate an additional $458.9 million for projected losses, bringing its total reserves to $2.29 billion. Additionally, Radian has put $421.8 million into a special reserve intended to make up for the fact that future premiums due to it will likely not be enough to cover projected losses. In the last year, Radian's planned acquisition by rival MGIC Investment Corp. of Milwaukee was canceled because of escalating problems at both companies.