PHILADELPHIA—Responding to a recent drop in the company's stock price, mortgage insurer Radian Group Inc. said its financial strength is solid and its liquidity remains strong.
Radian shares rose 25 cents, or 32.5 percent, to close at $1.02 Thursday. Shares have lost 83 percent of their value in the past month.
Radian said paid claims during the second quarter will be less than $230 million, below its previous guidance of $240 million, while first mortgage defaults in its portfolio declined by 9 percent during the quarter.
The mortgage insurer also said it is insuring mostly traditional, prime mortgages now, which it expects to generate profitability and long-term financial strength.
Mortgage insurers have been hit hard since the middle of 2007 because of a sharp rise in mortgage defaults, which have led to a spike in claims payments.
Radian posted an operating loss of $215.2 million, or $2.69 per share during the first quarter.
It had placed $1.7 billion in reserves to cover further expected losses, as of March 31.
