Question-and-Answer Session
Operator
(Operator Instructions). And we will first go to the line of David Hochstim with Bear Stearns.
David Hochstim - Bear Stearns
I had a couple of questions just on the SFAS-157, is that option consistent with the number, somebody, maybe Steve, explain what would happen now, as assuming spreads tighten, would you realize less of a benefit than you had if you hadn't adopted 157?
Bob Quint
Yeah. I mean, we received a sort of a big positive benefit this quarter from incorporating our own spread. So I think in the future, you have to look at the relative spread between the underlying collateral. So that's going to go the way it goes either, plus or minus. And then, Radians own spread would be taken as well. So assuming they go in the same direction, they would, they may offset. If they are going to different direction, that would have a different impact.
David Hochstim - Bear Stearns
But over time, assuming you get paid the way you expect and this would all kind of washout and you recover those losses you booked last year?
Bob Quint
That's right. Whatever is left, assuming it is only spread related, no matter whether it was the underlying collateral or Radian spread over time as deals expire the marks will be reversed out to zero.
David Hochstim - Bear Stearns
Okay. Can one of you provide some more color on the service adjustments, that you referenced and, and then may be also just again on the trend over the course of the quarter? Are we starting to see some more normal seasonality in delinquencies or is it just way too early to know that things aren't looking all worse?
David Applegate
The servicer adjustment was from a large national servicer where a previously standard processor was to report loans that were 90 days delinquent and greater. The MI industry as a whole traditionally looks for loans to be reported in 60 days. So that adjustment had to be made. We anticipated what that number would be through a discussion with the partner and then put up another accordingly a consistent reserve amount.
The general trends in terms of delinquencies we are seeing. I think at this point you would have to describe as seasonal. There was definitely in February and March a strong seasonal benefit, but as I referenced in my points all day books are seeing continued weakness and the areas of the country where you have seen property values decline are certainly in some level distressed. So it's too premature to say that we would pass this thing.
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