Triad Guaranty Not Coming to Canada
Triad Guaranty has axed its plans to enter the Canadian mortgage default insurance market. The company's U.S. parent lost $75 million last quarter due to soaring U.S. defaults. Now they're scrambling to mitigate further losses and build back their capital base.
As a result, the company said Wednesday that "capital management dictated our decision during the quarter to withdraw from Canada and contribute this capital to our U.S. insurance subsidiary."
It's too bad for consumers. Triad would have added even more pressure to an already competitive Canadian mortgage insurance market. The might have resulted in lower insurance rates and easier approval standards for many Canadians.
From Triad's perspective, however, they would have faced intense competition from CMHC, Genworth, AIG, and PMI. Moreover, if additional lenders start self-insuring it might have eaten even further into Triad's Canadian profits.
______________________________________________________
Triad Guaranty Canada is a mortgage default insurer offering "credit enhancement solutions" to lenders. According to the company, their solutions "allow homebuyers to achieve home ownership sooner, facilitate the sale of mortgage loans in the secondary market and protect lenders from credit default-related expenses."
