Radian Group Inc., the mortgage insurer, posted a worse-than-expected first-quarter loss Tuesday as more homeowners fell behind on payments.
The net loss was $217.4 million, or $2.69 a share, compared with $195.6 million, or $2.44, the year earlier, the Philadelphia company said. The average of estimates by three analysts Bloomberg surveyed was for a $1.80 per share loss.
Chief executive S.A. Ibrahim said in a press release that the loss was primarily attributable to paper losses on derivatives and a continued rise in defaults. "Our mortgage insurance franchise remains strong, with sufficient capital to continue writing" policies all this year, he said.
The company paid $152 million on first-lien claims in the quarter, "below expectations," and it reduced the estimated range of full-year mortgage insurance claims to $1.2 billion-$1.4 billion, from a February estimate of $1.4 billion-$1.7 billion.
New-policy sales dropped 36%, to $156.8 million, from $244.3 million the year earlier.
Even the most conservative projections about the effect of government programs "would result in a positive impact on future defaults, claims, reserves and future losses," Ibrahim said on a conference call. Radian remains an "approved" insurer for loans sold to Fannie Mae and Freddie Mac, he said.
