Triad Guaranty Inc., which no longer satisfies either of the government-sponsored enterprises' (GSEs) Type 1 mortgage insurer eligibility requirements and is thus obligated to file acceptable remediation plans with the GSEs, says it has subsequently met with representatives of Freddie Mac.
Following the filing by Triad of its Form 10-Q, Freddie Mac recently advised Triad that its insurance subsidiary is suspended as an approved mortgage insurer, subject to an appeals process currently under way. Triad intends to vigorously pursue this appeal with Freddie Mac, which must be made in writing by May 29.
Freddie Mac has informed Triad that it will continue to purchase mortgage loans insured or committed to be insured by Triad during the appeal process unless and until Triad and its customers are notified by Freddie Mac to the contrary. Triad believes this action by Freddie Mac should not have any immediate adverse impact on Triad's ability to write new mortgage insurance, which Triad is continuing to do with the support of the Illinois Division of Insurance, while it pursues its previously announced proposed transaction with Lightyear.
Triad also notes that it is continuing to negotiate definitive agreements with Lightyear Capital LLC, a New York-based private equity firm focused on financial services, which would result in the creation of a new monoline mortgage insurance company.
Source: Triad Guaranty Inc.