Triad Guaranty, a provider of private mortgage insurance coverage, has ended its negotiations with Lightyear Capital to form a new mortgage insurance company.
Triad has also reported that Freddie Mac informed Triad that the appeal of its subsidiary’s suspension as an approved mortgage insurer has been denied.
As a result of these developments, Triad’s subsidiary, Triad Guaranty Insurance, will cease issuing commitments for mortgage insurance effective July 15, 2008, and will work with its customers, the Illinois division of insurance and each of the government sponsored enterprises to assure an orderly transition of its business to run-off.
The company said that it is continuing to work with its financial advisor, Goldman Sachs, to explore whether other strategic alternatives are available, but Triad is not optimistic that any opportunities will surface.
Triad plans to reduce its workforce by approximately 100 persons in the coming weeks and will commence a run-off of its existing book of business.
Mark Tonnesen, president and CEO of Triad Guaranty, said: The difficult decisions made by our Board with respect to these matters were based on a candid and thorough evaluation of our current situation and how to best serve the interests of Triad and its customers and policyholders going forward. We want to thank Lightyear Capital for its efforts.
They worked very hard with us to develop a transaction that we believe would have ultimately served the interests of Triad’s stakeholders, but certain hurdles arose that prevented the transaction from being feasible.