Triad Sees MI Approval Suspended by Freddie Mac
Freddie Mac (FRE: 25.79, -1.90%) has suspended its approval of Triad Guaranty Inc. (TGIC: 2.09, -6.28%) as a private mortgage insurer, but the North Carolina-based MI provider will continue to write policies on Freddie Mac mortgage pending an appeal, the company said Thursday afternoon in an announcement.
Saying it would “vigorously pursue” the appeals process, already underway, Triad said the move by Freddie Mac “should not have any immediate adverse impact on Triad’s ability to write new mortgage insurance.”
Triad posted a net loss of $150 million during the first quarter as credit costs tied to its insurance of properties in so-called “distressed mortgages” pulled the troubled insurer further into the red. The insurer is actively engaged in discussions with Lightyear Capital LLC, a New York-based private equity firm, to create a new monoline mortgage insurance company and move its existing insurance operations into run-off.
“Freddie Mac and Fannie Mae are both continuing to accept new insurance written or committed by Triad,” company CEO Mark Tonneson said. “We welcome the opportunity to provide both the GSEs and our regulators with more details concerning our anticipated voluntary run-off plan and the benefits we believe can be achieved by completing the proposed transaction with Lightyear.”
For more information, visit http://www.triadguaranty.com.
Disclosure: The author held no positions in TGIC or FRE when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.