Radian Group Inc. CEO S.A. Ibrahim said he’s still optimistic for the mortgage insurer’s outlook, after highlighting challenges the company faces on a conference call today.
“All we wanted to do was be realistic and tell the market that the environment in the housing market has changed,” Ibrahim said in an interview. “It was intended to be more a realistic expectation-setting, rather than a downer.”
Radian shares tumbled as much as 8.9% after Ibrahim said the
“Nothing in today’s call was supposed to say we’re not going to get there,” Ibrahim said. “We’re still comfortable that we’ll get there.”
Rising interest rates have increased borrowing costs for consumers this year, threatening to slow the housing recovery that’s boosted shares of mortgage insurers such as Radian and MGIC Investment Corp. Both companies have more than doubled this year in New York trading.
The housing rebound has drawn newcomers such as Essent Group Ltd. and NMI Holdings Inc. to the market. Essent, backed by JPMorgan Chase & Co. and Goldman Sachs Group Inc., sold shares last month in an initial public offering.
Ibrahim said on the call that Radian had reduced rates by five basis points to match competitors’ price decreases. Rival Genworth Financial Inc. has said it is cutting prices for the coverage.
