Radian Suffers Blow to Its Lien Protection Product
|June 20, 2002|
|Cease and Desist Order [pdf]|
WASHINGTON/ -- In a significant regulatory blow to Radian Guaranty's offering of its Radian Lien Protection product, the California Department of Insurance issued a Cease and Desist Order this afternoon against the company. According to a press release from the Department, California Insurance Commissioner, Harry W. Low issued a "Cease and Desist Order to Radian Guaranty Inc., a Pennsylvania-domiciled company, ordering them to immediately stop marketing, soliciting and selling insurance policies that provide coverage for undisclosed property liens." Also issued was a Notice of Right to Hearing and a Notice of Fine. A fine of up to $5,000 per day may be imposed if the Order is violated.
"We are certainly pleased with the Commissioner's order," said James R. Maher, Executive Vice President of ALTA. "The order confirms what we have contended all along -- that the Radian Lien Protection product is, in fact, title insurance." Only licensed title insurance companies may sell title insurance, and according to the Department's press release, neither Radian Guaranty, Inc., nor Radian Express is properly licensed to transact title insurance business in the state of California.
"This is a victory not only for title companies, but for lenders and consumers as well," said Maher. "The benefits of the Radian product do not measure up to true title insurance. Its product does not involve a title search, and therefore would expose lenders and consumers to increased risk."
California joins several other states in its rejection of the Radian Product. Texas, Florida, New Mexico, Connecticut and North Carolina have rejected Radian's filing of their mortgage pool guaranty policy because of the Lien Protection component.
A copy of the Order is available on the ALTA's Web site at http://www.alta.org. For more details on ALTA's regulatory efforts against Radian, contact James R. Maher, ALTA's Executive Vice President at 1-800-787-2582.
The American Land Title Association represents title insurance companies and their agencies nationwide on a variety of industry and legislative issues. Members of the Association search and insure land titles to protect real estate investors including home buyers and mortgage lenders.
SOURCE: American Land Title Association