MBIA still expects to pay more claims as the credit quality of the debt it insures erodes.

The Armonk, N.Y.-based bond insurer late Tuesday posted fourth-quarter income of $451 million, or $2.24 per share, compared with a loss of $240 million, or $1.16 per share, for the fourth quarter of 2009.

Some measures of the money MBIA expects to pay out on defaulted debt continue to trend higher, however.

The company booked $562.8 million in “economic” losses — or money it expects to have to pay out because of defaults — on its $190 billion structured finance book. MBIA thought that delinquencies on residential mortgage debt would have tailed off by now, but they haven’t.

MBIA’s net income must be taken with a grain of salt; it is based on estimates and accounting principles that don’t necessarily reflect reality. Further, the quarter-by-quarter numbers are dwarfed by some of the bigger questions marks the company faces, namely its legal dispute with mortgage servicers, particularly Bank of America Merrill Lynch.

MBIA claims Countrywide Financial, a mortgage lender now owned by Bank of America, shoveled billions of dollars of shoddy mortgage loans into structures MBIA now insures, despite contractual agreements to only include loans meeting certain qualifications.

MBIA said it has paid $4.4 billion in claims on mortgage debt that, under its agreements with the servicers, never should have been securitized and insured in the first place — an amount that exceeds the company’s entire debt, entire equity, and all the combined after-dividend profits the company has ever earned.

The $4.4 billion in disputed claims represent nearly half of the claims the company has paid since 2007.

MBIA said that during the quarter it also commuted $15.7 billion of structured finance exposure, meaning it essentially paid investors to have the insurance stripped from their bonds.

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