By agreeing to buy Clayton Holdings for $305 million, Radian Group is essentially betting that the private mortgage securitization market will make a comeback.

Clayton provides outsourced services such as loan reviews and due diligence for mortgage-backed securities deals—demand for which would presumably pick up if private issuance takes off again. S.A. Ibrahim, Radian's chief executive, figures it's only a matter of time before that rebound happens.

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