Title Insurance Dispute Costs Trade Group a Member Firm
The Radian Group here has left the Mortgage Insurance Cos. of America, the trade group that represents the private mortgage insurance industry.
MICA and the other members of the group opposed Radian's efforts to get its Radian Lien Protection product approved in California.
Radian said RLP was a mortgage pool insurance policy. MICA sided with the American Land Title Association (the title industry trade group) in successfully lobbying the state's insurance commissioner, John Garamendi, that RLP was actually title insurance.
In a statement issued by Radian, the company said, "Radian has made a strategic decision to discontinue its membership in MICA based on the determination that the company is better served by re-deploying its time and resources in a manner more fitting with our long-term strategic goals as a global credit enhancement company. These goals focus on growing our mortgage insurance business both domestically and internationally through our new international mortgage team, as well as our financial guaranty and mortgage services business lines." The statement avoided mentioning the split in the industry over RLP.
Even though Radian left MICA effective July 1, 2003, neither side publicized the move until MICA issued its monthly report for July. A footnote indicated that Radian did not provide data for the report.
The move leaves MICA with six members: Mortgage Guaranty Insurance Corp., United Guaranty Corp., GE Mortgage Insurance Co., Republic Mortgage Insurance Co., The PMI Group and Triad Mortgage Insurance Corp. The other active mortgage insurer, CMG Mortgage Insurance, is a joint venture between PMI and CUNA Mutual Group.
Of those mortgage insurers, two are in the title business and thus could have been competitors of RLP. PMI has a subsidiary American Pioneer Title Insurance Co., while RMIC is a subsidiary of Old Republic Corp., a Chicago-based insurance holding company which has a separate subsidiary, Old Republic Title.
After Mr. Garamendi issued his ruling, a spokesman from PMI noted that Radian could be doing business with RLP if it got a license to do title insurance.
Speaking of the MICA report, the remaining private mortgage insurers did $30.6 billion in primary new insurance written during July, with $28.2 billion in traditional and $2.4 billion in bulk. In June, with Radian included in the data, there was $36.4 billion of primary new insurance written.
Application volume fell from 334,385 in June (with Radian data) to 291,678 (without Radian) in July. In July 2002, there were 255,671 applications received.
Meanwhile the cure/default ratio continues to slip going from 90.5% in June to 78.5% in July, with 35,131 cures and 44,743 defaults.
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