Radian Group Inc., Philadelphia, has completed a structured finance transaction to help manage nonprime credit risk that is the second of its kind.The transaction, Smart Home Reinsurance 2005-1 Ltd., was funded through the sale of $98.5 million of credit-linked notes backed by a pool of $1.68 billion of Alt-A mortgages that were insured by Radian. Roy J. Kasmar, president and chief operating officer of Radian, said the nonprime segment of the mortgage insurance market "is profitable, but it also requires a disciplined approach to risk management. Radian's experience in mortgage insurance and structured finance has enabled us to create a risk management solution so that we can continue to take advantage of growing opportunities in the [nonprime] market." The first structured transaction of this kind, Smart Home Reinsurance 2004-1, was completed in August 2004 and involved $882 million of first-lien, nonprime residential mortgages.

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