Radian Defies Financial Selloff After Freddie Grants Waiver
NEW YORK (TheStreet) --Radian Group(RDN) shares were higher Monday morning despite overall weakness in financial stocks after Freddie Mac(FMCC) said it would allow the mortgage insurer to continue to write new business in several states through 2013.
Radian shares were up 2.34% more than half an hour into the trading session even as the Financial Select Sector SPDR (XLF) was lower by 0.21% and mortgage insurers MGIC Investment Corp. (MTG) and Genworth Financial (GNW) were down by 1.71% and 0.57% respectively.
Radian, MGIC and Genworth have all received various waivers to continue writing new business even though their risk-to-capital ratios have exceeded regulatory requirements in many states. In certain states where regulators do not grant the necessary waivers, Freddie Mac and Fannie Mae(FMCC) have granted approvals. Radian disclosed the latest waiver Friday via a filing with the Securities and Exchange Commission after the market closed.
Mortgage insurers are expected to play an important role in the housing market once lawmakers get around to reforming it. Republicans and Democrats have indicated they want to scale back government subsidies to the mortgage market, though they have taken few if any steps toward actual reform for fear they will be blamed if the still-fragile market collapses.
-- Written by Dan Freed in New York.