Radian Guaranty became the first among seven private mortgage insurers to declare compliance with the regulatory capital standards under the Private Mortgage Insurer Eligibility Requirements (PMIERs). Radian met its PMIERs goals after receiving $325 million in cash and marketable securities from its parent Radian Group in exchange for a surplus note. In addition, the parent firm contributed $50 million to an exclusive affiliated reinsurer of Radian Guaranty. Radian Group expects the capital cushion to increase based in part on expected future financial performance at its MI subsidiary. Monies from other sources, including a profit commission of about $8 million based on performance to date, and $8.5 million in prepaid supplemental ceding commission also contributed to the MI’s capital. Hence, Radian Guaranty is not expected to require any additional capital contributions in order to ...
Quicken Loans’ S&P Rating Unaffected by Lawsuit Dismissal. Standard & Poor’s said a federal judge’s decision to dismiss a lawsuit by Quicken against the Department of Justice has not affected the lender’s ratings. According to the rating agency, Quicken’s rating remains at BB/Stable. Quicken’s lawsuit claimed that the government altered the method in which the FHA reviews loans and pressured the company to pay an “inexplicable penalty.” Although the penalty may be “inexplicable” in relation to the alleged violations, it would not be enough of a justification to alter Quicken’s current rating, S&P said. To affect the rating or outlook on Quicken, the penalty would have to be in the hundreds of millions of dollars or have severe restrictions on the types of mortgages Quicken could continue to originate, S&P explained. However, S&P believes such ...
Residential lenders issued a record $435.8 billion of Ginnie Mae securities in 2015, according to Inside MBS & ABS, a handsome 47 percent increase from the prior year.
Quicken Loans is considering its next move – possibly a change of litigation venue – following last week’s ruling by a Michigan federal district court dismissing the lender’s lawsuit against the Department of Housing and Urban Development and the Justice Department for failure to state a claim. The lawsuit, which challenged the DOJ’s use of the False Claim Act and HUD’s use of statistical sampling in post-endorsement loan reviews, was filed in April 2015, a week before the DOJ sued Quicken for allegedly filing false claims on FHA mortgages and other violations. Quicken’s lawsuit claimed...
Overall, Ginnie securitization of FHA and VA purchase loans increased by 37.7 percent and 37.9 percent, respectively, during the third quarter, according to Inside Mortgage Finance’s database.
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