The Radian Group lost $119 million in the second quarter but its mortgage insurance division wrote $8.3 billion of new MI policies during the period, an almost threefold increase from the second quarter of 2011.
Radian blamed its earnings performance on a $95 million charge from a change in the fair value of derivatives and other financial investments. A year ago the MI earned $137 million, including a $194 million fair value gain from those same investments.
In the first quarter Radian wrote $6.5 billion of new MI policies.
The firm reported that Home Affordable Refinance Program loans contributed another $2.4 billion to its second-quarter volume tally. But Radian and most mortgage insurers consider HAMP transactions a modification of existing coverage and do not include it in new policies written. Its HARP volume in the first quarter came to $930 million.
Radian Guaranty’s risk-to-capital ratio was 21-to-1 as of June 30, up slightly from 20.6-to-1 on March 31. The improvement was driven by the increase in net risk-in-force created by its recent book of business. At the end of second quarter, the mortgage insurer had $924 million of statutory capital, down from $1 billion one year prior.
Meanwhile, its competitor, Genworth Financial, reported that its U.S. mortgage insurance division lost $25 million in the second quarter, compared to an operating loss of $43 million in the first quarter. In the second quarter of 2011 it lost $255 million.
Genworth said the smaller losses are tied to a decrease in new delinquency development and effective loss mitigation programs.
Flow NIW was $3.6 billion, an increase of 20% from the first quarter. HARP added another $2.3 billion of business.
Genworth Mortgage Insurance Corp. has received an 18-month extension from the North Carolina Department of Insurance of its waiver for compliance with the risk-to-capital requirements of 25-to-1. Currently GEMICO has a 29.5-to-1 ratio and in the five states where it does not have a waiver, new business is being written out of Genworth Residential Mortgage Assurance Corp.
