Radian Guaranty is the latest private mortgage insurer to announce a change to its pricing structure for borrower-paid policies.

The Philadelphia company said in a press release that the move increases "risk-based granularity" to its pricing structure and allows it to meet the government-sponsored enterprises' capital requirements.

Radian is lowering its rates for mortgage borrowers who have a credit score over 740 and a loan term longer than 20 years, and for borrowers with a credit score over 680 but a loan term of 20 years or less.

However, borrowers with a credit score under 740 and a loan term over 20 years will have to pay higher rates.

Pricing philosophy among the private mortgage insurers has become a topic of interest among stock analysts and others who follow the industry, especially after Arch MI U.S. adopted a black-box methodology similar to one used by United Guaranty Corp.

More recently, Mortgage Guaranty Insurance Corp. in Milwaukee disclosed in its fourth-quarter earnings release that it was adjusting its pricing to charge less to higher-credit-score borrowers and conversely more to lower-credit-score ones.

Radian is also doubling the number of credit score buckets used in setting rates to eight from four.

Previously the company increased its rates for lender-paid mortgage insurance products. However, borrower-paid mortgage insurance is more prevalent product, and is believed to make up 75% of all new policies written.

Radian's new lender-paid insurance rates are scheduled to go into effect on March 28 and the borrower-paid rates are to increase on April 7. These increases are still subject to approval by state insurance regulators.

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