Radian Guaranty Inc., the second-largest mortgage insurer, has created a new post: liaison with Fannie Mae and Freddie Mac.
The Philadelphia company has tapped Sam D. King, senior vice president and national account manager, to be its point person with the two government-sponsored enterprises.
Fannie and Freddie are "the largest beneficiaries of private mortgage insurance," said Frank P. Filipps, chairman and chief executive of Radian, so it is natural, even overdue, that the company appoint an executive to deal with them full-time.
Radian is not the first in the industry to designate a primary contact with the secondary-marketing giants. PMI Mortgage Insurance Co. has had an official liaison with Fannie and Freddie for two years, a spokesman said.
But Mr. King's appointment comes at a turbulent time in relations between insurers and the GSEsThis year Fannie and Freddie have irked insurers by introducing alternative credit-enhancement arrangements, which the insurers view as encroaching on their territory.
Galvanized in part by the GSEs' insurance initiatives, several financial services trade groups have formed FM Watch, a coalition to oppose Fannie and Freddie's venturing outside the secondary mortgage market. Gerald Friedman -- chairman emeritus of Radian and founder of Amerin Guaranty, which in June merged with Commonwealth Mortgage Assurance Co. to form Radian -- is the chairman of FM Watch.
Mr. Filipps played down the highly publicized tensions between his industry and the GSEs. "We disagree with them on a couple of points," he said, adding that by appointing a liaison his company will increase dialogue with Fannie and Freddie. "The more appropriate discussions you have with people, the more opportunities you have to avoid areas of major disagreement,'' he said.
Mr. King comes from the Amerin side of the merger, where he was account manager for five years. Before that he was a regional vice president at Bear Stearns. His new duties will also include identifying business opportunities and designing insurance programs with the GSEs, Mr. Filipps said.