where do we find idiots like this, this has to be one of the biggest morons posting; by the end of the week, I expect the jobs number to be confirmed and that means a fairly strong economy and in turn it means housing prices are likely to firm, reducing losses for RDN; I cannot imagine a dumber post and think about it, the competition is terrifci for stupidity, pal you just broke new ground!
" Housing prices really have nothing to do with RDN. The jobs numbers, yes. The greater economy, yes. But housing prices, no. "
Are you kidding us? Housing prices have a 100% business, legal, and practical relationship to RDN's busines model.
Let me walk this through for you: 1. Mortgages and housing loan documents are legal documents which contain agreements to pay back the loan at specific interest rates and time periods. 2. The mortgage loan amount is based on the house value. 3. The house value is determined by an appraisal. 4. When the appraisal price is low, the new appraisal price may not be enough money to cover the cost of the current seller's mortgage.
5. Today, most Mortgages are not allowed to be greater than about 80% to 85% of a the house's value. 6. When people lose their jobs, housing prices fall because people without jobs can't get mortgages or pay bills. 7. When people walk away from their houses and they can afford to pay their mortgage, housing prices fall because the house gets foreclosed and the price is lowered in a foreclosure/bank owned sale.
8. RDN insures mortgages. 9. When housing prices fall, people can't sell their house for the amount of the mortgage. 10. When people can't sell their house at a high enough price to cover the cost of the mortgage, a default occurs. 11. Radian pays out money each time a default occurs and there was no fraud.
For all practical purposes, RDN's business model is based on steady or rising house prices. RDN could not exist in a long-term business model of falling house prices. RDN barely escaped going out of business when housing prices fell for 4 years. Imagine what would happen if housing prices fell for 10 or 20 years? Of course housing prices are related to RDN's performance as a company. From a business perspective Of Course housing prices have EVERYTHING to do with RDN.
RDN has a legal relationship to pay costs when people default on loans because they can't sell their house for a price that covers the mortgage amount. The sale's price is directly related to RDN's legal responsibility to pay money when housing prices are low. From a legal relationship, Of Course housing prices have EVERYTHING to do with RDN's ongoing ability to continue as a business entity.