Our Products
Mortgage Insurance
Public Finance
Structured Finance
Reinsurance
Financial Services
Mortgage Insurance
Radian provides private mortgage insurance, as well as risk management products and
services, to mortgage lenders. Mortgage insurance serves several important purposes: protecting lenders
from default-related losses on residential first mortgages, facilitating the sale of low-downpayment
mortgages in the secondary market and helping consumers with limited savings achieve homeownership.
Lenders generally require mortgage insurance on low-down-payment loans because experience
and research show that a borrower with less than 20 percent invested in a home is more likely to default on
a mortgage. The advent of mortgage insurance has meant that borrowers with little, and in some cases, no
downpayment can enjoy the benefits of owning a home.
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Public Finance
Radian provides financial guaranty coverage to under-served segments of the municipal
market. This coverage offers the investor an unconditional and irrevocable guaranty of full and timely
payment of principal and interest. Radian pioneered the concept of and specializes in insuring
investment-grade securities that may not qualify for coverage from the AAA municipal bond insurers,
typically for reasons of complexity, size or bond type.
Municipal bond insurance reduces borrowing costs for issuers, offers broader market
access and allows for greater ease of deal execution. Municipalities benefit from the lower interest rates
to help fund the development of public and private projects, including roads, utilities, schools and
health care facilities.
Radian actively participates in all sectors of public finance, including general
obligations, health care, higher education and secondary schools, lease-backed, privatized student housing,
senior living, special districts, tax increment financing, transportation, and water and sewer utility
revenue.
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Structured Finance
Radian seeks opportunities among standard and emerging asset classes, structuring and
underwriting sophisticated credit enhancement solutions for financial institutions, global corporations,
securitization issuers and qualified governmental entities. Radian participates in a broad segment of the
structured finance market through asset-backed and mortgage-backed securities, asset-backed commercial
paper, collateralized debt obligations and credit default swaps. These deliver significant value to
clients by reducing risk and volatility, enhancing securities distribution and optimizing allocated
capital.
Radian also develops sophisticated risk mitigation programs, private-label
securitizations, and portfolio and capital-relief transactions, working with holders of mortgage risk, who,
due to the rapid evolvement of the mortgage industry, are faced with the challenge of effectively managing
their assets. Through various products including hybrid mortgage insurance, which combines elements of
mortgage insurance and financial guaranty, and net interest margin securities, Radian helps its clients
maximize profitability by effectively helping them manage their assets and stratify the risks in their
portfolios.
In addition, the company provides credit enhancement on non-traditional mortgage-related
assets, such as second mortgages, home equity lines of credit and mortgages with loan-to-values above 100%,
and financial guaranties for secured consumer loans, as well as credit support to direct lending and
securitization markets for secured consumer loans.
Radian is currently evaluating opportunities to leverage its expertise in structured
finance to bring customized solutions to Europe, Canada and Australia.
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Reinsurance
Radian provides financial guaranty reinsurance to the primary insurers of municipal
bonds, asset-backed securities and structured finance transactions. Reinsurance is the commitment by one
insurance company to reimburse another, the ceding company, for a specified portion of the insurance risks
underwritten by the ceding company. If a loss is covered by reinsurance, the reinsurer reimburses the
insurer for claims paid; therefore, it is transparent to the ultimate investor.
Financial guaranty reinsurance helps companies manage single and aggregate portfolio risk
exposure, increase insurance capacity and meet regulatory and rating agency capital requirements. Rating
agencies take reinsurance into account when evaluating bond insurers, giving credit based on the ratings
of their reinsurers.
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Financial Services
Radian's ownership interests help lending institutions meet their needs for effective
balance-sheet management by purchasing, servicing and securitizing sub- and non-performing assets,
including mortgages, credit card receivables, student loans and bankruptcy debt.
Radian has a 46% ownership interest in C-BASS, which specializes in the acquisition,
servicing and securitization of credit-impaired residential mortgages that have been or are being
foreclosed, combining advanced credit risk analysis, seasoned loss mitigation expertise, and proprietary
default management technology to provide special and subprime servicing for sub- and non-performing
mortgages.
Radian also has a 21.8% equity interest in Sherman Financial Group LLC, which is a
consumer asset and servicing firm specializing in charged-off and bankruptcy plan consumer assets that it generally purchases at deep discounts from national financial institutions and major retail
corporation and subsequently seeks to collect. In addition, Sherman originates credit card receivables through its subsidiary and has a variety of other similar ventures related to consumer assets.
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