Strange bedfellows are now suing each other. A sure sign that Radian, MGIC, and C-BASS are singing the mortgage blues came to the forefront as a recent news article shows Radian and MGIC feuding like business partners who cant get along. The two sides have disagreed on whether MGIC is obligated to complete its buyout of Radian, now that their joint interest in a subprime mortgage investor has become all but worthless. MGIC is suing Radian for more information. MGIC and Radian are mortgage insurance companies.
Clearly MGIC and Radian have been issuing the same forward-looking statements. Did the lenders instead of the borrowers insure the loans and investments? Did anyone realize MGIC and Radian are co-owners of C-Bass and Sherman Acquisition? Sherman Acquisition is a debt collector. What is the relationship between mortgage insurance (or lack of it) and debt collection?
What the general public fails to realize is the connection between these two, C-BASS, and debt collectors. When I saw the article about them suing each other I asked if they slid the lawsuit across the hall. MGIC and Radian are competitors in same industry Mortgage Insurance and have significant shared investments. Mortgage insurance providers have been hard hit in the last 3 years on lost mortgage insurance premiums paid by borrowers. These losses were caused in part by piggyback loans, which may be called subprime, but are primarily Alt-A loans. High-risk loans can have LPMI (Lender paid mortgage insurance), and more claims may have caused the start of the divorce. Did partner C-BASS make shabby loans while turning to MGIC and Radian to pay insurance on those loans?
We invite you to read the Household HSBC watch three part series entitled About Debt for more insight into the tangled and interwoven world of mortgages, subprime, insurance and debt collectors. You should keep some of these bottom feeders as far away from your finances as humanly possible.