GO
Loading...

UPDATE 1-U.S. housing recovery boosts mortgage insurer Radian's volumes

Thursday, 7 Nov 2013 | 9:16 AM ET

* Third-quarter loss $0.07/share

* Posts loss of $7.1 million on investments

* Wrote new mortgage insurance of $13.7 bln in quarter

Nov 7 (Reuters) - Radian Group Inc, the biggest private U.S. mortgage insurer, wrote the second-highest quarterly volume of new insurance in its history, helped by a recovering housing market and fewer loan defaults.

However, the company posted a loss for the third quarter compared with a profit a year earlier as it booked a loss on investments after a large net gain in the prior period.

A recovery in the housing market has helped mortgage insurers attract new and profitable business, giving them some respite from the losses they have been posting since 2008.

"The high-quality business written after 2008, which represents 57 percent of our primary risk in force, is expected to generate attractive returns," Radian Chief Executive SA Ibrahim said in a statement.

Mortgage insurers cover losses when homeowners default on payments and foreclosures fail to recoup costs.

Radian wrote new mortgage insurance of $13.7 billion in the third quarter, about 30 percent more than it did a year earlier.

The primary mortgage insurance delinquency rate fell to 7.8 percent in the quarter from 12.6 percent, indicating that loan defaults had fallen.

Rival MGIC Investment Corp posted its second straight quarterly profit in October after fewer people defaulted on loans.

Radian reported a net loss of $12.7 million, or 7 cents per share, for the third quarter ended Sept. 30, compared with a net profit of $14.3 million, or 11 cents per share, a year earlier.

The results include a loss of $7.1 million on investments compared with a net gain of $84.7 million in the year-earlier quarter.

Radian shares were up slightly at $14.62 in premarket trading. The stock closed at $14.52 on Wednesday on the New York Stock Exchange, having more than doubled so far this year.

  Price   Change %Change
RDN
---