Radian Group Inc. (Radian Group) engages in the mortgage and real estate services business.
The company provides both credit-related mortgage insurance coverage and an array of products and services across the residential real estate and mortgage finance industries. The company has one reportable business segment—Mortgage Insurance.
The company’s Mortgage Insurance segment aggregates, manages and distributes the U.S. mortgage credit risk for the benefit of mortgage lending institutions and mor...
Radian Group Inc. (Radian Group) engages in the mortgage and real estate services business.
The company provides both credit-related mortgage insurance coverage and an array of products and services across the residential real estate and mortgage finance industries. The company has one reportable business segment—Mortgage Insurance.
The company’s Mortgage Insurance segment aggregates, manages and distributes the U.S. mortgage credit risk for the benefit of mortgage lending institutions and mortgage credit investors, principally through private mortgage insurance on residential first-lien mortgage loans, and also offers other credit risk management solutions, including contract underwriting, to its customers.
In addition, the company provides other mortgage and real estate products and services to its existing and new customers through its Mortgage Conduit, Title, Real Estate Services and Real Estate Technology businesses, which it reports in its All Other category.
Business Strategy
The company strategically focuses on supporting affordable, sustainable and equitable homeownership through its Mortgage Insurance business, as well as creating other opportunities for a place to call home by delivering innovative solutions combined with superior levels of service to its customers across the residential mortgage and real estate spectrum.
The company focuses on growing its businesses, diversifying its revenue sources and seeking to optimize. The key elements of the company’s business strategy are to expand and diversify its business and revenue streams by continuing to execute its Mortgage Insurance business plan, while simultaneously pursuing growth through strategic diversification and leveraging data, analytics and technology as a strategic differentiator across its businesses. The company continues to seek and develop new and innovative opportunities to build upon its core mortgage credit risk competencies by expanding its mortgage market presence and further diversifying its revenue streams, including through its Mortgage Conduit, Title and Real Estate Services businesses.
The key elements of the company’s strategy are to continue to grow the economic value of its insured mortgage portfolio by writing high-value NIW leveraging risk-adjusted pricing informed by data and analytics; continue to drive improved operating performance, including through the use of data, analytics and technology as a strategic differentiator; leverage its market presence and brand recognition to expand distribution of its diversified products and services across existing and new customers, including through its Title and Real Estate Services businesses; and leverage its industry knowledge, core competencies and market position to expand its mortgage market presence through its secondary-market Mortgage Conduit business.
Mortgage Insurance
Private mortgage insurance plays an important role in the U.S. housing finance system because it supports affordable homeownership, while helping to protect mortgage lenders, investors and the GSEs, who are the primary beneficiaries of the company’s mortgage insurance, by mitigating default-related losses on residential mortgage loans.
The performance of the company’s Mortgage Insurance business is particularly influenced by macroeconomic conditions and specific events that impact the housing finance and real estate markets, including seasonal fluctuations and other events that impact mortgage originations and the credit performance of its mortgage insurance portfolio, most of which are beyond its control, such as housing prices, inflationary pressures, unemployment levels, interest rate changes, the availability of credit, natural disasters and other national and regional economic conditions.
The company’s Mortgage Insurance business is subject to comprehensive regulation by state and federal regulatory authorities and the GSEs. As the largest purchasers of conventional mortgage loans, and therefore, the main beneficiaries of private mortgage insurance, the GSEs impose eligibility requirements, known as PMIERs, that private mortgage insurers must satisfy to be approved to insure loans purchased by the GSEs. These requirements and practices, as well as those of the federal regulators that oversee the GSEs and lenders, impact the operating results and financial performance of private mortgage insurers.
Mortgage Insurance Products
Primary Mortgage Insurance
Primary Mortgage Insurance represents the company’s most common form of mortgage insurance execution. Based on market demand, the company is providing Primary Mortgage Insurance on an individual loan basis as each mortgage is originated, but it also has the ability to provide Primary Mortgage Insurance on individual loans in an aggregate group of mortgages after they have been originated. The company mainly writes Primary Mortgage Insurance in a first loss position, where it is responsible for the first losses incurred on an insured loan subject to a policy limit.
The terms of the company’s Primary Mortgage Insurance coverage are set forth in a Master Policy that it enters into with each of its customers. Among other things, the company’s Master Policies set forth the applicable terms and conditions of its mortgage insurance coverage, including among others: loan eligibility requirements; premium payment requirements; coverage terms, including cancellation of coverage; provisions for policy administration; mortgage servicing standards and requirements; exclusions or reductions in coverage under certain circumstances; insurance rescission and rescission relief provisions; claims payment and settlement procedures; and dispute resolution procedures. The company’s Master Policy forms, which are updated periodically, including in response to requirements issued by the GSEs, are filed in each of the jurisdictions in which it conducts business.
Primary Mortgage Insurance provides protection against mortgage defaults at a specified coverage percentage. When there is a valid claim under Primary Mortgage Insurance, the company’s maximum liability typically is determined by multiplying the claim amount, which consists of the unpaid loan principal, plus past due interest and certain expenses associated with the default, by the coverage percentage.
Other Mortgage Insurance Products
Pool Mortgage Insurance: The company’s Pool Mortgage Insurance policies were privately negotiated and is separate from the Master Policies that it uses for its Primary Mortgage Insurance.
Customers
The principal customers of the company’s Mortgage Insurance business are mortgage originators, such as mortgage banks, commercial banks, savings institutions, credit unions and community banks.
The company actively monitors its customer concentration and regularly engage in efforts to diversify its customer base; however, the increasing use of custom rate cards for individual lenders in the mortgage insurance marketplace has increased the likelihood that a significant portion of NIW volume generated in any given period may be attributable to a relatively small number of customers. The company’s largest single mortgage insurance customer (including branches and affiliates) measured by NIW, accounted for 5% of NIW during 2024. The percentage of NIW generated by the company’s top 10 customers was 30% in 2024.
Sales and Marketing
The company’s sales and marketing efforts are focused on establishing, maintaining and growing valuable customer relationships. Given the range of solutions the company offers across its businesses, its sales strategy includes seeking opportunities with new customers, as well as expanding relationships with its existing customers.
Marketing and communications activities include direct marketing; advertising; digital marketing, including email, content, and social media; public relations and thought leadership; brand strategy and expression; event marketing, including customer meetings, conferences and trade shows and other targeted initiatives designed to generate new sales opportunities, drive customer adoption of the company’s services and retain its existing customers. The company continues to adapt its sales and marketing efforts based on data and other insights, such as customer behavior, preferences, and trends, as well as the environment, to leverage tools and techniques to engage with customers.
All sales and marketing efforts are supported by functional areas that provide additional touch points for the company’s customers. For example, the company’s Client Solutions Team is responsible for managing and growing customer relationships and promoting increased customer adoption and its Customer Service and Training Teams provide customized service as well as educational sessions to its customers.
All Other
All Other activities include the company’s Mortgage Conduit, Title, Real Estate Services and Real Estate Technology businesses.
The businesses included in the company’s All Other category are dependent upon overall activity in the mortgage finance and real estate markets, as well as the overall health of the related industries. Due, in part, to the transactional nature of the businesses, revenues for the company’s All Other category are subject to fluctuations from period to period, including fluctuations that reflect the seasonal volume fluctuations in these markets.
All Other Products and Services
Mortgage Conduit
In 2022, the company launched Radian Mortgage Capital to expand its capabilities to participate in the mortgage market to aggregate, manage and distribute residential credit risk. Radian Mortgage Capital, a mortgage conduit, acquires residential mortgage loans with the intention of then selling the loans directly to mortgage investors, including Freddie Mac, and, subject to market conditions, distributing them into the capital markets through private label securitizations, with the option to retain and manage structured components of the underlying credit risk.
Radian Mortgage Capital is licensed in 49 states and the District of Columbia and positioned to purchase and hold residential mortgages and servicing rights on a nationwide basis.
Title
As a national title provider, the company offers a comprehensive suite of insurance and non-insurance title and real estate settlement services to mortgage lenders, mortgage investors and the GSEs, as well as directly to consumers for residential mortgage loans. The company’s title solutions range from fully-insured products to uninsured title searches and home equity loans, as well as services that support lenders with a range of traditional, hybrid and fully digital closing solutions.
Real Estate Services
The company provides its customers with real estate asset management services, which include: managing REO properties owned primarily by financial institutions and mortgage investors, including the GSEs; providing a range of services for the benefit of the single-family rental asset class, including by facilitating the property valuation and diligence services needed to support single-family rental warehouse lending and securitization activity; and offering a web-based asset management workflow solution to assist its customers in managing REO assets, rental properties and other real estate activities.
In addition, through its licensed real estate broker subsidiary, homegenius Real Estate, the company provides a suite of real estate valuation products and services to lenders, servicers, investors and GSEs, including broker price opinions and various technology-enabled valuations.
Real Estate Technology
In addition to the services, the company has developed a proprietary real estate technology platform to deliver a configurable experience designed to engage and support consumers across the real estate lifecycle. These digital services and solutions include national home search capabilities using unique data and photo search experiences; interactive valuation estimates; title services; a service to match interested homebuyers with local real estate agents; and ongoing interactions subsequent to home purchase, including consideration of home equity lending options.
The company is exploring strategic options to maximize the value of this platform, which is offered primarily through its licensed real estate broker subsidiary, homegenius Real Estate.
Investment Policy and Portfolio
The company’s investment portfolio is its primary source of claims paying resources and also impacts its earnings. The company seeks to manage its investment portfolio within its targeted risk and return tolerances based on its liability projections and business and economic outlook to maintain sufficient liquidity levels to satisfy its operating requirements and other financial needs. The company’s investment strategy is developed by taking into consideration applicable investment restrictions, limitations and conditions imposed on investments held by its regulated entities, and in particular, state limitations and PMIERs rules applicable to Radian Guaranty, which holds the majority of its total investment portfolio.
The company’s investment strategy uses an asset allocation methodology that takes into consideration regulatory constraints, its business environment and consolidated risks, as well as current investment conditions.
As of December 31, 2024, the company internally managed 11% of the investment portfolio (the portion of the portfolio largely consisting of the U.S. Treasury securities, money market funds, equities, mortgage insurance-linked notes and other mortgage related assets, and certain exchange-traded funds), with the remainder primarily managed by three external managers. External managers are selected by management based primarily upon their ability to meet its investment goals and objectives, based upon factors, such as historical returns and the quality and stability of their management teams.
Enterprise Risk Management
As a financial services organization, risk management is a critical part of the company’s business.
The company’s ERM framework is designed to provide executive management with the ability to identify and evaluate the most significant risks. As part of its ERM program, the company’s businesses employ comprehensive risk management functions.
In addition, the company maintains an Information Security Program that is designed to protect its corporate data, including data it provides to others, as well as data entrusted to it by its customers and partners.
Regulation
As part of its Title services business, the company offers title insurance through Radian Title Insurance. Radian Title Insurance is an Ohio domiciled title insurance underwriter and settlement services company that is licensed to issue title insurance policies in 41 states and the District of Columbia. Radian Title Insurance is an indirect subsidiary of Radian Group and is wholly owned by Radian Title Services Inc. The company is subject to the insurance holding company laws of Pennsylvania and Ohio because all of its mortgage insurance subsidiaries are domiciled in Pennsylvania and Radian Title Insurance is domiciled in Ohio. These insurance holding company laws regulate, among other things, certain transactions between Radian Group, the company’s insurance subsidiaries and affiliates.
Radian Mortgage Capital is a Freddie Mac approved seller/servicer and FHA approved non-supervised-investing lender, and is pursuing Fannie Mae seller/servicer approval. Radian Mortgage Capital acquires and aggregates residential mortgage loans with the intention of selling them directly to mortgage investors and, subject to market conditions, distributing them into the capital markets through private label securitizations. Radian Mortgage Capital is the master servicer for the mortgage loans held for sale in its portfolio and loans it has sold to Freddie Mac, and has engaged a third-party subservicer to manage the day-to-day servicing operations for these loans. Radian Mortgage Capital, in its capacity as a master servicer, is subject to numerous state and federal laws that require it to maintain a program to monitor and oversee that the mortgage loans it acquires and sells are originated, serviced and enforced in compliance with applicable laws.
The mortgage loans that Radian Mortgage Capital purchases and holds are subject to many federal laws, including the Truth in Lending Act, Consumer Financial Protection Act, Equal Credit Opportunity Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, Fair Housing Act and RESPA.
Radian Valuation Services LLC is an appraisal management company, licensed in 50 states and the District of Columbia, that supports certain valuation services provided by homegenius Real Estate. Real estate appraisal management statutes and regulations vary from state to state, but generally grant broad supervisory powers to agencies or officials to examine companies and enforce rules. While these businesses are generally state regulated, the Dodd-Frank Act established minimum requirements to be implemented by states regarding the registration and supervision of appraisal management companies. Most states have based their legislation on model legislation developed by the Appraisal Institute for the registration and oversight of appraisal management companies.
History
Radian Group Inc. was founded in 1977. The company was incorporated in Delaware in 1991.
