Triad Guaranty Inc., the Winston-Salem, N.C.-based mortgage insurer currently liquidating its insured portfolio, lost nearly $5 million in the first quarter, ending a string of three consecutive quarters reporting a net profit.
In the fourth quarter 2010, Triad earned $27 million, while in the first quarter of that year it lost $28 million.
Ken Jones, president and chief executive, said the company has a $594 million deficit in assets as of March 31. This is an increase from $586 million at the start of the quarter. He repeated his past warning that Triad is unlikely to have enough income from existing assets and future premiums to meet current and future policyholder obligations.
There was a decrease in the number of new defaults in its delinquent loan inventory, but Triad "did not receive as much benefit from the positive development of our reserves during the quarter compared to the fourth quarter of 2010, said Jones.
The company said its net settled claims declined 23% and 26% compared with the fourth quarter of 2010 and the first quarter of 2010, respectively.
Jones explained "We believe the drop in our net settled claims is primarily related to loan servicers' issues surrounding foreclosure policies and practices, including in some cases, foreclosure moratoriums. The drop in net settled claims had little impact on our 2011 first quarter financial results because we continue to reserve for a default until we settle the default or receive definitive information from the servicer that the default has cured."
In October 2009, Triad sold its information technology and operating platform to Essent Guaranty Inc., the Radnor, Pa.-based newest private mortgage insurance underwriter.
