April 23 (Reuters) – Mortgage insurer MGIC Investment Corp posted a narrower first-quarter loss as the housing market shows signs of improvement and fewer Americans struggle with their mortgage payments.
Mortgage insurers protect lenders when homebuyers make downpayments below 20 percent. As house prices soared in the first-half of the last decade, MGIC Investment, Radian Inc and life insurer Genworth's mortgage unit, insured millions of mortgages at low premiums.
When the crisis led to a wave of foreclosures, the insurers were forced to pay out billions of dollars and were left with weak balance sheets and high risk ratios.
MGIC, one of the largest mortgage insurers in the United States, reported its lowest rate of new defaults in five quarters as the housing market stabilizes and the unemployment rate falls.
New notices of default – a measure of how many new mortgages entered delinquent status – fell 20 percent.
MGIC, posted a narrower first-quarter loss of $19.6 million, or 10 cents per share, helped by higher realized gains.
Realized gains rose to $77.6 million, from $5.8 million a year ago.
Despite the improvement, this is still the company's seventh straight quarterly loss and analysts do not expect it to post a profit this year. MGIC has posted net losses for the last five years.
Net paid claims – paid in case of default or foreclosure – fell slightly to $673 million.
The Milwaukee-based company's shares, which traded at the $65 levels in 2007, closed at $3.68 on the New York Stock Exchange on Friday.
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