Radian (RDN)

Risks

• The COVID-19 pandemic adversely impacted us and, in the future, could again adversely affect our business, results of operations or financial condition.
• Radian Guaranty may fail to maintain its eligibility status with the GSEs, and the additional capital required to support Radian Guaranty’s eligibility could reduce our available liquidity.
• Our insurance subsidiaries are subject to comprehensive state insurance regulations and other requirements, which we may fail to satisfy.
• Changes in the charters, business practices or role of the GSEs in the U.S. housing market generally, could significantly impact our businesses.
• Legislation and administrative and regulatory changes and interpretations could impact our businesses.
• Our success depends on our ability to assess and manage our underwriting risks; the premiums we charge may not be adequate to compensate us for our liability for losses and the amount of capital we are required to hold against our insured risks. We expect to incur losses for future defaults beyond what we have reserved for in our financial statements.
• If the estimates we use in establishing loss reserves are incorrect, we may be required to take unexpected charges to income, which could adversely affect our results of operations.
• Our Loss Mitigation Activity is not expected to mitigate mortgage insurance losses to the same extent as in prior years; Loss Mitigation Activity could continue to negatively impact our customer relationships.
• Reinsurance may not be available, affordable or adequate to protect us against losses.
• An extension in the period of time that a loan remains in our defaulted loan inventory may increase the severity of claims that we ultimately are required to pay.
• If the length of time that our mortgage insurance policies remain in force declines, it could result in a decrease in our future revenues.
• Our delegated underwriting program may subject our mortgage insurance business to unanticipated claims.
• Our mortgage insurance business faces intense competition.
• Our NIW and franchise value could decline if we lose business from significant customers.
• The current financial strength ratings assigned to our mortgage insurance subsidiaries could weaken our competitive position and potential downgrades by rating agencies to these ratings and the ratings assigned to Radian Group could adversely affect the Company.
• Our business depends, in part, on effective and reliable loan servicing.
• We face risks associated with our contract underwriting business.
• A decrease in the volume of mortgage originations could result in fewer opportunities for us to write new mortgage insurance business and conduct our homegenius business.
• We are exposed to risks associated with our homegenius business that could negatively affect our results of operations and financial condition.
• We rely upon proprietary technology and information, and if we are unable to protect our intellectual property rights, it could have a material adverse effect on us.
• The credit performance of our mortgage insurance portfolio is impacted by macroeconomic conditions and specific events that affect the ability of borrowers to pay their mortgages.
• Our success depends, in part, on our ability to manage risks in our investment portfolio.
• Climate change and extreme weather events could adversely affect our businesses, results of operations and financial condition.
• Our reported earnings, stockholders’ equity and book value per share are subject to fluctuations based on changes in our investments that require us to adjust their fair market value.
• The discontinuance of LIBOR may adversely affect us.
• Radian Group’s sources of liquidity may be insufficient to fund its obligations.
• Our revolving credit facility contains restrictive covenants that could limit our operating flexibility. A default under our credit facility could trigger an event of default under the terms of our senior notes. We may not have access to funding under our credit facility when we require it.
• Our information technology systems may fail or become outmoded, be temporarily interrupted or otherwise cause us to be unable to meet our customers’ demands.
• We could incur significant liability or reputational harm if the security of our information technology systems is breached, including as result of a cyberattack, or we otherwise fail to protect confidential information, including personally identifiable information that we maintain.
• We may not continue to pay dividends at the same rate we are currently paying them, or at all, and any decrease in or suspension of payment of a dividend could cause our stock price to decline.
• We are subject to litigation and regulatory proceedings.
• We rely on our management team and our business could be harmed if we are unable to retain qualified personnel or successfully develop and/or recruit their replacements.
• Investments to grow our existing businesses, pursue new lines of business or new products and services within existing lines of business subject us to additional risks and uncertainties.