Radian Posts Large Loss but Commences with Stock Offering

Mortgage insurer Radian Group posted a first quarter loss of $310 million but signaled its intention to move forward with a $550 million public stock offering. At press time its shares were down 10% to $13.11 with other MI stocks trading down as well. The nation's third largest MI company (in terms of new coverage written) noted that it completed the sale of its remaining equity interest in Sherman Financial, a consumer asset and servicing firm. However, the impact of the sale, which is expected to result in a pre-tax gain of about $70 million, will be reflected in Radian's second-quarter results. The mortgage insurance business at Radian lost $237 million for the first quarter of 2010, compared with a loss of $89 million one year prior. Despite the loss, there was positive news: for the first time in nearly four years Radian had fewer delinquent loans at the end of the quarter compared with the start of the quarter. As of March 31, Radian's book-of-business had delinquencies of 143,914 loans underwritten through the primary channel in default -- or 17.64% of its portfolio. Radian expects to end 2010 with fewer delinquent loans than in 2009.