It appears as though the US’s largest private mortgage insurer might be on its way to gain more market share.
Radian Group announced last week it will start directly offering its products through Ellie Mae’s Encompass360, the core end-to-end mortgage operations system for more than 80,000 mortgage originators.
Other private mortgage insurance is available through the Encompass360 platform, according to a spokesperson for Ellie Mae. All of them want to be on the system in order to be available for thousands of mortgage originators, he said.
But Radian is currently and claims it will continue to be the leader in private MI going forward. It currently controls about 28-30% of new mortgage insurance written, while the FHA controls about 55%, according to a Radian spokesperson. But industry analyst Jim Ryan at Morningstar Equity Research says Radian’s market share is closer to 20%, however, and its leading competitors like MGIC control a share in the low teens, and Genworth, and United Guaranty control even less, Ryan said.
As the Federal Housing Authority has explicitly said it plans to pull from insuring mortgages by raising its premiums and certain loan restrictions, Radian and its top PMI competitors will continue to fight for market share, Ryan said.
Radian’s CEO S.A. Ibrahim said at a recent investor conference that the FHA, its once biggest competitor, is now aligned the company. He said that the FHA will be relying on companies like Radian that have strong capital backing to play a bigger role in the MI industry.
New competitors like Essent Guaranty are also gaining some market share and available on the Encompass360 system, Ellie Mae’s spokesperson said.