(Reuters) – Mortgage insurer MGIC Investment Corp posted its second straight quarterly profit, after six years of losses, as a recovery in the U.S. housing market lowered the number of defaulters.
The percentage of MGIC's loans that were delinquent, excluding bulk loans, fell to 9.69 percent at Sept. 30 from 12.34 percent a year earlier.
MGIC's profit was $12.1 million, or 4 cents per share, for the third quarter ended Sept. 30, compared with a loss of $246.9 million, or $1.22 per share, a year earlier.
Mortgage insurers such as MGIC and Radian Group Inc have revived their fortunes as home prices appreciate and their main competitor, the Federal Housing Administration, cuts its exposure to the market by charging higher premiums.
Rising house prices means fewer home owners have loans that exceed the value of their property, cutting delinquencies.
New insurance written by MGIC rose 23 percent to $8.6 billion.
MGIC shares rose more than 20 percent in the third quarter, outperforming the broader S&P 500 Index, which rose about 5 percent in the same period.
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