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Radian Group execs note improved credit quality on mortgage insurance portfolio

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Radian Group execs note improved credit quality on mortgage insurance portfolio

executives saidApril 27 that the company's portfolio has benefited from a marked improvementin credit quality compared with the period just before the recession.

Duringthe first quarter of 2016, 57% of the company's risk in force was for policieswith optimal FICO credit scores, compared with 26% for year-end 2007. Duringthe first quarter of 2016, 95% of Radian's risk was for customers with primecredit and just 2% for those whose credit was rated subprime. In 2007, 72% ofthe loan portfolio was prime, while 10% of it was subprime.

"Creditquality of today's portfolio is vastly superior to the business written priorto the housing and economic downturn," CEO Sanford Ibrahim said during aconference call to discuss first-quarter earnings.

The19% cure rate from loans in default is the highest the company has seen sincemid-2007, Ibrahim said.

Anotherexpected improvement to the company's portfolio is the reinsurance programannounced during thequarter, executives said. CFO J. Franklin Hall said the quota share agreementnot only decreases the percentage of the company's single-premium risk inforce, it helps manage its mix of new insurance written and comes with a lowcost of required capital.

Radianalso has continued to try to diversify its revenue streams with its lines ofinsurance services, but that portion did not grow much during the quarter dueto seasonality and a slowdown in non-government-sponsored securitizations,Ibrahim said.