911631--3/14/2006--TRIAD_GUARANTY

related topics

{loan, real, estate}

{regulation, government, change}

{loss, insurance, financial}

{capital, credit, financial}

{product, market, service}

{stock, price, share}

Because a growing portion our business is sensitive to interest rates, a significant increase in rates would cause higher monthly mortgage payments for borrowers that could lead to a greater number of defaults, which would adversely impact our business. The premiums we charge for mortgage insurance on non-prime loans, ARMs and Alt-A loans may not be adequate to compensate for future losses from these products. A growing portion of our insurance in force consists of loans with high loan-to-value ratios or loans that are non-prime or both, which could result in more and larger claims than loans with lower loan-to-value ratios or prime loans. A downgrade or potential downgrade of the financial strength ratings assigned to our primary insurance subsidiary could weaken its competitive position. Changes in the business practices or legislation relating to Fannie Mae and Freddie Mac could significantly impact our business. Legislation and regulatory changes, including changes impacting the GSEs, could significantly affect our business and could reduce demand for private mortgage insurance. Our revenues and profits could decline if we lose market share as a result of industry competition or if our competitive position suffers as a result of our inability to introduce and successfully market new products and programs. If mortgage lenders and investors select alternatives to private mortgage insurance, the amount of insurance that we write could decline, which could reduce our revenues and profits. Changes in regulatory requirements could impact captive mortgage insurance arrangements for all industry participants.

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911631--3/14/2006--TRIAD_GUARANTY_INC