Triad Seeking Capital To Maintain MI Viability.

Winston Salem, NC -- Triad Guaranty Corp. here, the smallest of the private mortgage insurers, raised the possibility of the company going into run-off and ceasing writing new mortgage insurance policies. This disclosure came in the company's delayed 10-K filing.

The filing had been on hold because Triad said it was engaged in discussions with an unnamed potential investor. However, it appears those negotiations were fruitless. The filing states the company needs to "significantly augment our capital resources in the second quarter of 2008 in order to preserve our ability to continue to write new insurance."

Meanwhile, according to the data collected by the trade group for the private mortgage insurance industry, February 2008 had the lowest amount of total primary new insurance written in a year.

The Mortgage Insurance Cos. of America reported for the first time in a year total primary insurance written fell below $20 billion. There was $19.2 billion written in February 2008, with $19.1 billion coming through the traditional channel. This was the lowest amount written in the traditional channel since April 2007.

In February 2007, there was $12.6 billion of traditional and $4.3 billion of bulk insurance written.

The bulk channel is suffering because of the problems in the subprime marketplace; just 223 certificates or policies were issued during the month.

Triad did give a glimpse into the alternatives it is looking at. "The proposals that have been considered involve structures under which Triad would implement a 'run-off' plan and a newly formed mortgage insurer would acquire certain of Triad's employees, infrastructure, sales force and insurance underwriting operations. In addition, we would cease writing new business. These proposals do not involve a direct investment in Triad. Completing any such transaction would be subject to numerous conditions, including ...