Dec. 24 (Bloomberg) -- Radian Group Inc., the mortgage insurer whose stock more than doubled this year, advanced in New York trading after Freddie Mac extended the approval of a subsidiary to sell coverage.
Radian gained 5.3 percent to $5.40 at 1:24 p.m. It has rallied more than 130 percent this year. Rival MGIC Investment Corp. rose 2.1 percent. Trading on the New York Stock Exchange closed early today ahead of the Christmas holiday.
Freddie Mac, the government mortgage buyer, approved Radian Mortgage Assurance to write coverage through the end of next year, Philadelphia-based Radian said in a statement after the close of trading on Dec. 21. The approval gives Radian a method to continue selling insurance if other units breach regulatory limits of risk relative to capital, according to the statement.
“This helps to improve the credit composition of our mortgage insurance book and better position Radian for a return to operating profitability next year,” Chief Executive Officer S.A. Ibrahim said in the statement.
Some of Radian’s competitors including PMI Group Inc. and Triad Guaranty Inc. were forced to stop selling new policies after falling short of the standards as losses backing home loans drained capital. Mortgage insurers cover losses when homeowners default and foreclosures fail to recoup costs.
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