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Radian's 'Smart Home' Targets Nonprime Market

Radian Group has completed a structured finance transaction to help the company manage its risk from nonprime mortgage loans.

The transaction involved Smart Home Reinsurance 2005-1 Limited, a company that was created and funded through the sale of $98.5 million of credit-linked notes backed by a $1.68 billion pool of Radian-insured alt-A mortgage loans.

Radian said that Smart Home enables it to transfer nonprime mortgage risk while simultaneously increasing its capacity and improving new business opportunities in that segment of the market.

By combining its history of mortgage insurance with its structured finance expertise, Radian said that Smart Home better positions the company to create high-return growth opportunities in the nonprime market.

"The nonprime segment of the mortgage insurance market is profitable, but it also requires a disciplined approach to risk management," said Roy Kasmar, president and chief operating officer of Radian, in a company news release.

He went on to say that Radian can continue to take advantage of the Smart Home structured finance solution to take advantage of growing opportunities in the nonprime market.

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