May 1 (Reuters) – Radian Group Inc posted a second straight quarterly loss, hurt by the change in value of derivatives and other financial instruments, but the mortgage insurer said its risk ratios improved in the quarter.
Radian and its rivals MGIC Investment Corp and Genworth Inc insure home loans when the downpayments are less than 20 percent.
These insurers underwrote millions of mortgages , at low premiums, in the heady days of the housing boom. But the wave of foreclosures unleashed by the crisis, swamped their capital levels and raised their risk ratios.
At the end of the first quarter, Radian Guaranty's risk-to-capital ratio improved to 20.6:1, from 21.5:1 at December 31.
Radian has taken steps to improve its capital levels -including selling some Radian Asset portfolios to bond insurer Assured Guaranty and reinsurance deals.
Radian Asset is also expected to pay an ordinary dividend of about $50 million to the Radian Guaranty in July, and is expected to continue to provide support to the mortgage insurance unit, the company said.
Losses from loans insured before the housing crisis also slowed. Radian paid $218.2 million in mortgage insurance claims in the quarter, down 40 percent from a year ago.
For the first quarter, Radian posted a loss of $169.2 million, or $1.28 per share, compared with a profit of $103.0 million, or 77 cents per share, a year ago.
The quarter included combined losses from the change in fair value of derivatives and other financial instruments of $90.6 million.
Last year, Radian posted a profit on gains from a change in the value of its similar financial structures.
Radian's shares, which once traded at more than $60 before the housing meltdown in 2007, closed at $3.12 on Monday on the New York Stock Exchange.
The company's shares trade at less than half their book value, at the end of March, of $7.65.
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