Radian predicts ‘significant’ losses
Mortgage insurer Radian Group Inc. said today it expects to incur "significant" losses in 2009, as a deteriorating economy and steep rise in unemployment have increased the likelihood that borrowers will default on mortgages.
Mortgage insurer Radian Group Inc. said today it expects to incur "significant" losses in 2009, as a deteriorating economy and steep rise in unemployment have increased the likelihood that borrowers will default on mortgages.
In a Securities and Exchange Commission filing, the Philadelphia company said falling home prices have increased the chances that borrowers "may voluntarily default" on mortgage payments "when their mortgage balances exceed the value of their homes," even if they have the ability to make the payments.
In addition, Radian said some borrowers may voluntarily default to "take advantage of certain loan modification programs currently being offered."
Radian said in the filing that it is "actively exploring alternatives" for raising capital, including issuing stock or selling its 21.8 percent ownership interest in Sherman Financial Group LLC.
Company shares, which ranged in price from 70 cents to $8.74 in the last 52 weeks, were up 16.96 percent (19 cents) late this morning, to $1.31.