Radian Provides Comment On Proposed GSE Requirements For Private Mortgage Insurer Eligibility; Radian Confidence Will Comply With Proposed PMIERs

Radian Guaranty Inc., the mortgage insurance subsidiary of Radian Group Inc., today commented on the proposed Private Mortgage Insurer Eligibility Requirements (PMIERs) developed by Fannie Mae and Freddie Mac (GSEs) and issued by the Federal Housing Finance Agency (FHFA), which were released earlier today. The proposed PMIERs are intended to provide revised requirements that the GSEs will impose on private mortgage insurers (MIs), including Radian Guaranty, to remain eligible insurers of loans purchased by the GSEs. “Radian fully supports the need for strong counterparties to Fannie Mae and Freddie Mac, and the need for well-defined standards against which private mortgage insurers should be measured,” said Radian Guaranty President Teresa Bryce Bazemore. “We believe appropriately structured PMIERs will better position our industry to continue serving its critical role in the housing finance market, including providing worthy borrowers with access to homeownership.” The proposed PMIERs reflect limited initial input from Radian. The company will provide additional commentary to the FHFA on several areas of the proposed PMIERs during the public comment period, which is expected to end on Monday, September 8, 2014. Among these areas, Radian will note that the proposed capital requirements are more onerous than Radian's historical default experience suggests would be needed to withstand a severe stress event. The company's comments will also outline how the proposed PMIERs are inconsistent with the FHFA's stated goal of expanding access to mortgage credit and reducing taxpayer risk by increasing the role of private capital in the mortgage market. Bazemore added, “We look forward to continuing our dialogue with the FHFA and the GSEs as they gather input on the PMIERs. We are proud of our strong working relationship that was also in place as Radian met all of its obligations during the greatest economic stress in our company's history, paid more than $5 billion in claims, and strengthened our capital levels to support continued low downpayment lending.” Radian will host a conference call at 6:00 p.m. Eastern time today to discuss the proposed PMIERs and their potential impact on the company. Details for the conference call may be found below; the proposed PMIERs and additional information may be found on Radian's website at www.radian.biz/pmiers. TIMEFRAME AND EXPECTATION FOR COMPLIANCE After the public comment period ends, the FHFA is expected to review and consider input before publishing the final PMIERs. All aspects of the PMIERs are expected to become effective 180 days after their final publication. Approved insurers will be given an extended transition period of up to two years from the final publication date to be in compliance with the financial requirements of the PMIERs. Based upon an estimated final publication date of the end of 2014, Radian expects a transition period through January 1, 2017. Radian remains an eligible mortgage insurer with the GSEs and expects to be able to fully comply with the PMIERs within the transition period. The company has approximately $800 million of currently available liquidity; the potential to monetize or utilize its financial guaranty business, which had $1.2 billion of statutory capital and an additional $376 million in claims-paying resources as of March 31, 2014; and the potential to leverage various other options, if needed, including external reinsurance. Radian Asset received approval from the New York Department of Financial Services to pay an extraordinary dividend to Radian Guaranty of $150 million. Radian Asset expects to request an additional dividend in 2015. Radian Chief Executive Officer S.A. Ibrahim added, “We are confident that Radian will be able to comply with the proposed PMIERs within the transition period. Based on our holding company cash position and other potential options, we do not expect compliance with the PMIERs to require Radian to raise external capital.” Ibrahim continued, “We do believe that these proposed requirements, if not modified, have the potential to increase the cost of borrowing for future homebuyers, and could also restrict access to credit. This may impact many low- to moderate-income, deserving borrowers, including certain minority groups, who are particularly vulnerable today based on lower credit scores and limited savings for a downpayment.” CONFERENCE CALL Radian will discuss the proposed PMIERs in a call today, starting at 6:00 p.m. Eastern time. The conference call will be broadcast live over the Internet at http://www.radian.biz/page?name=Webcasts or at www.radian.biz. The call may also be accessed by dialing 800-230-1093 inside the U.S., or 612-288-0329 for international callers, using passcode 331702 or by referencing Radian. A replay of the webcast will be available on the Radian website approximately two hours after the live broadcast ends for a period of one year. A replay of the conference call will be available approximately two hours after the call ends for a period of thirty days, using the following dial-in numbers and passcode: 800-475-6701 inside the U.S., or 320-365-3844 for international callers, passcode 331702.