Triad Guaranty, Winston-Salem, N.C., has reported a net loss of $198.2 million ($13.36 per share) for the second quarter, compared with net income of $12.0 million ($0.80 per share) a year earlier.
Two weeks after the quarter ended, on July 15, the company's subsidiary Triad Guaranty Insurance Corp. stopped issuing commitments for new mortgage insurance coverage and entered into runoff. That decision followed an unsuccessful attempt by management to capitalize a new mortgage insurance company.
"The size of our second-quarter loss reflects the depth and breadth of the collapse of the housing and mortgage markets," said William Ratliff, chairman of Triad, who is also taking on the interim chief executive job in the wake of the retirement of Mark Tonnesen. "The continued growth in the number of defaults and foreclosures during the quarter required a significant increase in reserves. The distressed markets of California, Florida, Arizona, and Nevada continue to be adversely impacted by declining home prices, and reserves for defaults in these states comprised approximately 68% of the increase in our reserves for the quarter."
After entering runoff, Triad reduced its work force by 45%, Ratliff said.