Debt buyer Sherman Financial Group has re-purchased the last remaining outstanding stake in the firm from mortgage insurer Radian Group, according to an announcement today from Radian.
Sherman Financial, New York, is the largest U.S. buyer of delinquent debt based in revenue, according to annual rankings by Collections & Credit Risk. Earlier this year, the Federal Trade Commission identified the company as one of nine debt-buying firms it ordered to turn over information about their purchasing and collection practices for a pending review of industry practices, see
Radian, in its first quarter earnings report, said it is divesting its entire stake in Sherman for $172 million in cash in a deal reached Monday. Radian is in need of capital after a partnership with mortgage insurer, MGIC, failed in 2008.
Sherman Financial and its management team will own all of the outstanding shares in the company after the re-purchase is complete, according to an SEC filing. Previous filings revealed Radian’s remaining stake in Sherman at an estimated 30%.
Radian and MGIC once owned an 83% stake in Sherman. MGIC sold all of its remaining stake in Sherman beginning in 2008 to management. Radian, based in Philadelphia, then built its stake in Sherman.
