Triad Guaranty Ordered to Reduce Payments on Claims

HousingWire has an article thas spells out some bad news for banks.

Triad Guaranty (TGIC), a mortgage insurance company, has been ordered by its state regulator not to pay out more than 60% of the amount of any claim in order to preserve capital. The remaining 40% of the claim is paid via an IOU. Triad can make good on the IOU once its regulatory capital recovers. Given that Triad is in runoff mode, not writing new insurance, it’s hard to see how that could ever happen.

Triad has about $17 billion of insurance in force. The net result of the decreased payouts will be increased loss severity for the lenders that would look to Triad for payment.

This is probably not the last mortgage insurer who will run into these sorts of problems. The pillars of the temple continue to crumble.

Comments

[teammisek:]

Whaat government is allowed to do that? Oh yeah...The same one who buys it's own debt with the money it printed today!
When the banks pay back these "payday" loans does the money get shredded or does it go in the coffer for another tax break so we can pay our taxes?
Whooooaah.....The next inflation cycle is going to HURT!!!

Steve

Apr 02 04:37 PM

[Allan Frain:]

It seems that Triad counterparties failed to place former employees within the ranks of the state regulators. Worked for GS.

Apr 03 02:01 PM

[Tom Lindmark:]

Nice thought! I guess there are limits to how many institutions you can corrupt.


On Apr 03 02:01 PM Allan Frain wrote:

> It seems that Triad counterparties failed to place former employees
> within the ranks of the state regulators. Worked for GS.

Apr 03 02:11 PM