MBIA Incorporated’s (MBI) third quarter operating loss of $3.50 per share substantially missed the Zacks Consensus Estimate of a loss of 99 cents per share. Last year, the company had reported a loss of $3.42 per share. Results were negatively affected by a continued deterioration in the performance of the company’s insured second-lien residential mortgage loan securitization exposures and increase in case loss reserves reflecting expectations for additional claim payments to policyholders.  Net loss was $727.8 million during the quarter, compared to $806.5 million in the prior-year quarter. Premiums earned during the quarter totaled $181.2 million, down 23% from $234.7 million in the third quarter of last year. Net investment income dropped 56% to $156.8 million. During the quarter, the company recorded a $238.8 million pretax loss related to its insurance of mortgage-backed securities.  It also posted an $810.2 million pretax unrealized loss on its insurance ...

MBIA's rating slashed to deep junk status, litigation worries continuesOn Thursday, June 25, bond insurer MBIA's (MBI) senior debt rating was lowered by Moody's Investors Service to Ba3 -- three levels below investment grade -- from Ba1. The downgrade cited expectations of further portfolio deterioration due to its exposure to risky mortgage-backed securities coupled with the uncertainties associated with the ongoing litigation over the company's restructuring that happened last February.Moody's also changed the rating outlook of MBIA Insurance Corp. to negative. Additionally, Moody's affirmed the investment-grade Baa1 rating of National Public Finance Guarantee Corp., MBIA's dedicated municipal-bond insurance company.Investors and world's 18 largest banks, including JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) have sued MBIA, claiming a fraudulent restructuring in February this ...