The mortgage insurance division of Genworth Financial lost $152 million in the third quarter, much wider than the $116 million loss in last year's third quarter as problems with its Florida book-of-business continued to worsen.
Some analysts, including Sandler O'Neill, anticipated an MI loss of less than $40 million in the quarter.
In a statement, the company noted that its Florida "cure rate" on bad loans is 10% compared to 25% for all other states. (For Florida alone it booked an $85 million loan loss reserve. The state accounts for 16% of its claims paid, the largest ratio for the firm.)
Although Genworth's MI unit continued to bleed red ink, the overall company earned $83 million, or 17 cents per share, up from a profit of $19 million, or 4 cents per share, in the same quarter a year ago.
Among MI companies, Genworth ranks fifth in terms of policies-in-force, according to figures compiled by National Mortgage News and the Quarterly Data Report.
In trading Friday morning its shares were down 12% to $10.60. "While the better International performance is encouraging, the surprising weakness in the U.S. Mortgage Insurance segment will lead to the shares trading lower," Sandler said in a research note.
