Mortgage insurer Radian Group said its inventory of delinquent loans has fallen for eight consecutive months, but expressed concerns regarding where the trend might be headed in the fourth quarter.
Its delinquent loan inventory dropped by more than 6,000 units in August and nearly 7,000 during the first two months of the third quarter.
New delinquencies totaled 19,014 loans during the two-month period. Radian experienced 15,758 cures, 5,530 paid claims, and 1,357 rescissions and denials.
The MI said the number of rescissions and denials in August were nearly double July's total.
In addition, 4,296 units came out of the delinquency inventory in August because of the termination of "certain structured transactions," which also reduced Radian's primary insurance-in-force.
Some of the figures were disclosed in an interview company chief executive S.A. Ibrahim gave to National Mortgage News. (The full story appears in Monday's print edition of the newspaper.)
Historically, the fourth quarter is the worst period for delinquencies. However the aging of the delinquent loan portfolio has disrupted those historical norms, especially when it comes to the amount of Radian's reserves, Ibrahim said.
Approximately 45% of the delinquent inventory had missed 12 or more payments. Radian's typical percentage of loans in this bucket is between 10% and 20%. Older delinquent loans have higher amounts of reserves attached to them.
Meanwhile, Radian wrote $1 billion of primary new insurance in July and $1.1 billion in August.
