News

01/28/2010

Housing Experts Gather to Discuss the State of American Homeownership

PHILADELPHIA, Jan 28, 2010 (BUSINESS WIRE) -- Radian Group Inc. today released highlights from a recent panel discussion among housing experts from corporate and government sectors on the state of American homeownership. Confidence in a slow but steady housing recovery and optimism in the country's core value of homeownership were dominant themes.

The forum, held last Friday in Washington, DC, brought together prominent housing and mortgage industry thought leaders to discuss how best to preserve the dream of homeownership in America. "Whatever our opinions, we're all in this together, working side-by-side to find common solutions," said moderator Teresa Bryce, president of Radian, which organized the event for congressional staffers, industry leaders and news media.

Joining Ms. Bryce was John Courson, president and CEO of the Mortgage Bankers Association; Mark Fleming, chief economist, First American CoreLogic; Larry Gilmore, director of the Hope Now Alliance in Washington, DC; and Andrew Jakabovics, associate director for Housing and Economics at the Center for American Progress.

Radian CEO S.A. Ibrahim welcomed the group and encouraged an open dialogue while emphasizing that "American homeownership is not the interest of a single industry, but a value of our entire country." Mr. Ibrahim then introduced Congressman Paul Kanjorski (D-PA), Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises. Congressman Kanjorski urged the audience to face the current challenges by thinking outside the box and creating good programs. He emphasized optimism in the American system of homeownership and the opportunities that exist for entrepreneurs and bright people to share ideas and solve these problems.

The forum can be viewed in its entirety at www.radian.biz/media/homeownershipamericandream.aspx. Discussion highlights include:

Home price trends

Trends in home prices are "bouncing around the bottom," but showing positive signs of improvement. Following an expected downtown in home prices in Q4 2009 due to typical seasonal home buying trends, forecasts from First American CoreLogic data point to rebounds in the spring and summer and continued recovery beyond.

Loan modifications and foreclosures

• A growing "shadow" inventory of properties in distress that have not yet hit the market, but are expected to result in default, will adversely affect gains in the housing recovery.
• Despite difficulty in addressing the vast numbers of homeowners attempting loan modifications, a continued slow but steady recovery is expected. Portfolio lending will rebound, and post-bubble corrections in loan product offerings will keep tabs on high-risk lending and over-extension among borrowers.
• Technology is a key component in ensuring success with loan modifications and HAMP applications. Online programs and user-friendly processes, such as the recently launched HOPE NOW LoanPort, will allow both borrowers and servicers to improve the speed and effectiveness of application and document submission, status updates and tracking loan performance.
• Studies show that borrowers whose loan amounts were reduced by 20 percent or more are more likely to avoid further default.

Mortgage insurance - government and private

• FHA loans now account for approximately 30 percent of all mortgage originations, a 10-fold increase from just a few years ago. FHA has made recent changes to tighten lending requirements and raise credit standards in order to better position its book of business.
• Private mortgage insurance has continued to provide important liquidity to the mortgage market for new originations; private mortgage insurers pay claims and assist borrowers with loan modification and workout solutions.

Macroeconomic factors

• Long-term unemployment is one of the biggest factors hindering a more robust and aggressive recovery in the housing sector. Addressing this issue will be fundamental to ensuring more Americans' right to homeownership.

About Radian

Radian Group Inc. (NYSE: RDN), headquartered in Philadelphia, provides private mortgage insurance and related risk mitigation products and services to mortgage lenders nationwide through its principal operating subsidiary, Radian Guaranty Inc. These services help promote and preserve homeownership opportunities for homebuyers, while protecting lenders from default-related losses on residential first mortgages and facilitating the sale of low-downpayment mortgages in the secondary market. Additional information may be found at www.radian.com.

SOURCE: Radian Group Inc.

Radian Group Inc.
Emily Riley, 215-231-1035
emily.riley@radian.com