* First-quarter profit $0.15/share vs est. $0.10
* Delinquent loans 7.9 pct of total vs 10.9 pct year earlier
* Shares rise as much as 8 pct (Adds details from the conference call; updates shares)
April 22 (Reuters) - Mortgage insurer MGIC Investment Corp posted its highest quarterly profit since 2007 as fewer homeowners defaulted on their payments in an improving U.S. housing market, sending the company's shares up as much as 8 percent.
Rising house prices mean fewer homeowners have loans that exceed the value of their property, reducing delinquencies.
"I am pleased with the credit performance during the quarter and am encouraged by the level of the new business being written ...," Chief Executive Curt Culver said in a statement.
MGIC's loans that were delinquent, excluding bulk loans, fell to 7.9 percent of total loans as of March 31 from 10.9 percent a year earlier.
MGIC and other mortgage insurers such as Radian Group Inc and life insurer Genworth Financial Inc's mortgage unit protect lenders in cases where homebuyers make downpayments below a certain threshold.
An increase in timely repayments is helping these companies recover some of the losses incurred after the housing bubble burst and foreclosures soared.
The market share of MGIC and Radian rose also after their main rival, the Federal Housing Administration, raised premiums to replenish its dwindling cash reserves.
MGIC had a market share of about 14 percent in the quarter ended December, which is expected to rise to 16 percent in 2014, Culver said on a post-earnings conference call.
The preliminary risk-to-capital ratio at MGIC's combined insurance operations was 17.6-to-1 as of March 31. Regulators usually allow mortgage insurers to have a maximum risk-to-capital ratio of 25-to-1.
MGIC reported a net income of $60 million, or 15 cents per share, for the first quarter ended March 31, compared with a loss of $72.9 million, or 31 cents per share, a year earlier.
Analysts on average had expected a profit of 10 cents per share, according to Thomson Reuters I/B/E/S.
MGIC's shares, which traded at as much as $70 before the housing bubble burst in 2007, were up 6.7 percent at $8.89 in afternoon trading on the New York Stock Exchange on Tuesday.
Radian's shares were up 4.4 percent at $14.56, while Genworth's stock was up 5.1 percent at $17.76. (Reporting by Tanya Agrawal in Bangalore; Editing by Sriraj Kalluvila and Kirti Pandey)