Fed Reserve Bank opens door for Radian to achieve $48 billion NIW in 2013
My forecast is for Radian to write monthly $4 billion/$48 billion annually NIW in 2013. However, depending on FHA business as high #$%$ billion a month.
Radian will write $37 billion in 2012, they have $33.27 billion now, as of November 30, 2012.
The Fed Bank said today that they will keep interest rates at present level until 2015 to allow homeowners to refinance to lower rates on their mortgages. So, the pace of mortgage applications will Radian to maintain present momentum.
I expect Radian risk to capital to exit 2012 with a 19 to 1. The Federal Reserve Banks accomodative policies will continue to support the US housing recovery.
Many investors don't realize the help that HARP 2.0 has had on the US Housing Recovery by allowing underwater borrowers to refinance to lower rates.
Think of the number of foreclosures that have been prevented. Many borrowers with LTVs of greater than 100% and payments based on interest rates of 6% or higher!
Foreclosures were driving all the mortgage insurers into bankruptcy. Even the structured finance industry is left in ruins as the weight of souring in RMBS securitizations. Luckily, MBIA and Assured Guaranty remain.
Radian Asset Assurance is in runoff, with all the contingency capital going to Radian Mortgage Guaranty. By the way, Radian Asset has a little over $200 million that can be put into statutory capital boosting Radian's capital base that could be used to support $5 billion risk in force for Radian Mortgage.