Radian Records Loss But Sees Brighter Days Ahead

Although mortgage insurer Radian Group continued its money losing ways in the fourth quarter, management is looking ahead to what it believes will be a brighter future — with improving liquidity and a stronger capital position. In 4Q, Radian lost $92 million, a marked improvement over the same period last year when it lost $250 million. For all of 2009, Radian lost $148 million vs. $411 million in 2008. S.A. Ibrahim, chief executive, said not only has the MI taken care of any near-term liquidity issues, it anticipates it will have excess liquidity through 2012. Unlike some of its peers, the company's risk-to-capital ratio is trending downward: 15.4-to-1 at the end of 2009 compared to 16.4-to-1 at the end of 2008. Still, in case of the "unexpected event we need it in the first place," Radian has prepared an affiliate, Amerin Guaranty, to write business in states where Radian Guaranty might run afoul of the 25-to-1 standard. The company is prepared to write mortgage insurance business in "an uninterrupted fashion" Mr. Ibrahim said. New insurance written for the fourth quarter 2009 was $2.4 billion, with $17 billion written for the whole year. Radian is looking to grow, having moved into new markets, but this growth will not occur at the expense of loan quality, he noted.