UPDATE 3-PMI Group posts 12th straight quarterly loss; shrs fall

* Q2 loss/share $0.88 vs est loss $0.65/share

* Premiums earned falls 17 pct

* Says defaults from troubled vintages peak

* Stock falls 17 pct (Adds details from conference call, share movement)

BANGALORE, July 29 (Reuters) - Mortgage insurer PMI Group Inc PMI.N posted its twelfth straight quarterly loss, which was wider than analysts' estimates, hurt by a drop in premiums earned, sending its shares down as much as 17 percent.

PMI's quarterly results came in strong contrast to that of its bigger rival MGIC Investment Corp MTG.N, which recently swung to a surprise quarterly profit after three straight years of posting losses. [ID:nSGE66I0JP]

PMI’s executives, however, sounded encouraged by the sequential decline in defaults and said defaults from troubled vintages had peaked.

The company’s U.S. Mortgage Insurance’s primary loans in default declined to 138,431 as of June 30, from 147,248 as of March 31, 2010 due to lower levels of new notices of default.

The company expects total primary default inventory for 2010 to be lower than 2009.

Mortgage insurers like PMI and rivals Radian Group Inc RDN.N and MGIC have suffered huge losses from backing subprime bonds and mortgages that saw a surge in defaults as U.S. credit and housing markets worsened.

Mortgage insurers assist home buyers who cannot offer a 20 percent down payment.


For the second quarter, the company posted a loss of $150.6 million, or $1.11 a share, from continuing operations, compared with a loss of $222.6 million, or $2.71 a share, a year ago.

Excluding items, it lost 88 cents a share, compared with analysts’ average estimate for a loss of 65 cents per share, according to Thomson Reuters I/B/E/S.

Premiums earned fell 17 percent to $149.7 million.

Total revenue fell to $128.9 million from $202.2 million, hurt by lower new insurance written and a fall in primary insurance.

For the period ended June 30, primary insurance fell about 11 percent to $107.6 billion.

Losses and loss adjustment expenses fell to $320.5 million from $480.8 million.

U.S. mortgage insurance operations posted net loss of $115.6 million, compared with a loss of $175.8 million last year.

Shares of the Walnut Creek, California-based company were trading down 14 percent at $3.27 in afternoon trade on the New York Stock Exchange. They touched a low of $3.15 earlier in the day.

About 1.6 million shares changed hands by 1253 ET, well above the stock’s 10-day moving average of 1.4 million shares. (Reporting by Archana Shankar, Sweta Singh in Bangalore; Editing by Vinu Pilakkott and Maju Samuel)