Radian Guaranty, a mortgage insurance subsidiary of Radian Group (RDN), has inked a master transaction agreement related to a group of 25,760 first-lien mortgage loans held by Freddie Mac.
Freddie Mac became delinquent as of 31 December 2011.
Signed on 29 August 2013, the agreement offers for the future treatment of these loans, including claim payments, loss mitigation activity and insurance coverage, while eradicating Radian Guaranty's claim exposure on 9,756 loans that were delinquent and 4,586 loans that were re-performing as of 31 July 2013.
Radian CEO SA Ibrahim said that the main aim of the company's mortgage insurance business is to actively decrease its legacy exposure.
"This agreement is an important step in resolving our remaining legacy risk, and reduces our total number of primary delinquent loans by 12.6 percent," Ibrahim added.
With the signing of the recent agreement, Radian Guaranty's total exposure on this group of loans, including loans that are currently re-performing, totals to $840m.
The company, which had already reimbursed $370m of claims on these loans, has paid nearly $255m to Freddie Mac to cover claim exposure on these loans.
The insurer has deposited $205m in a collateral account to cover loss mitigation activity on these loans, which will be released to Radian Guaranty to the extent that it rescinds, denies, or curtails these loans and such amounts become final under the contract.
The underwriter said that it will supervise all claims submitted pertaining to these loans in accordance with its insurance policy for these loans and in a manner consistent with its normal claims handling practices.
Headquartered in Philadelphia, RDN offers private mortgage insurance and related risk mitigation products and services to mortgage lenders nationwide through its principal operating subsidiary, Radian Guaranty.
