Genworth Financial, which controls the nation’s fifth largest mortgage insurance firm, reported a net loss of $96 million in the second quarter, citing continued problems in the MI space.
In the same quarter a year ago the Richmond-based insurer earned $42 million.
Like many MI parent firms, Genworth has been plagued by losses on its ‘legacy’ business because of the housing crisis and record high foreclosures.
Genworth’s poor performance was driven by what it calls a “reserve strengthening” to the tune of $300 million because of the MI business.
Despite the increased cost, the firm reported that new flow delinquencies declined 18% from the prior year and 10% sequentially.
In an analyst note Sandler O’Neill said the firm’s MI business “contributed a loss of $253 million to operating income, in line with our expectation for a $252 million loss.”
In after hours trading its shares were up slightly to $7.85. Sandler has a ‘buy’ rating on the stock.
According to figures compiled by National Mortgage News and the Quarterly Data Report, Genworth insures roughly $109 billion of home mortgages. Among new policy issuers it ranks fourth.
