Radian Group Inc.
RDN
Financials
2
exclusion reasons
1 theme
This page is part of our public exclusion list — a transparency tool that shows which companies we screen out and why. It is not investment advice, and it is not an accusation. But it is subject to change as our understanding of the facts evolves.
Radian Group Inc. is a mortgage insurer whose primary business is providing private mortgage insurance (PMI) to lenders. This business model is fundamentally tied to the extension of high-risk mortgage credit. While not a direct lender, Radian profits from and enables lending to borrowers who cannot afford a standard down payment, often locking them into loans with higher overall costs. The company's revenue is directly derived from fees on these riskier loans.
The Consumer Financial Protection Bureau (CFPB) has taken enforcement action against Radian's subsidiary, Radian Guaranty Inc., for providing illegal kickbacks to lenders in exchange for mortgage insurance referrals. In a 2013 settlement, the CFPB alleged these reinsurance agreements were designed to circumvent anti-kickback laws, ultimately increasing costs for borrowers. This pattern of regulatory action highlights how the company's core operations have been implicated in practices that exploit the financial vulnerability of homebuyers.
Evidence of specific, exploitative loan terms or targeted predatory lending by Radian itself is not detailed in the provided sources. The exclusion rests on the company's central role in the ecosystem of high-loan-to-value mortgage lending, a system historically associated with predatory outcomes, and its documented regulatory violations aimed at securing its position in that market.
Radian Group, through its mortgage insurance subsidiary Radian Guaranty, was one of four national mortgage insurers targeted by the Consumer Financial Protection Bureau in 2023 for allegedly providing improper kickbacks to mortgage lenders. The CFPB filed complaints and proposed consent orders to stop the practice, which involved providing services and marketing programs to lenders in exchange for referrals of mortgage insurance business. This alleged scheme created a conflict of interest and could have led to borrowers being steered toward more expensive insurance products.
This enforcement action follows a history of related legal challenges. In 2013, Radian was among a group of mortgage insurers that agreed to pay approximately $15 million to settle similar claims brought by the U.S. Department of Housing and Urban Development. Earlier litigation, such as the 2002 case *Mullinax v. Radian Guar. Inc.*, also centered on allegations of illegal referral payments. Furthermore, Radian Group and its executives were defendants in a 2007 securities fraud class action lawsuit (*In re Radian Securities Litigation*), which alleged violations of federal securities laws.
Research Sources
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Companies appear on our exclusion list based on our investment judgment — not because they've done anything illegal. This is a difference of values and opinion, not an accusation of wrongdoing. Exclusion does not constitute a recommendation against investing in any company, and absence from the list does not constitute a recommendation to invest.
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