Aug. 8--A major increase in loan defaults contributed to another stunning loss for Triad Guaranty Inc.

The company, which is based in Winston-Salem, reported a loss of $359.4 million in the second quarter yesterday. The company reported losses of $55.2 million in the first quarter of this year and $198.8 million in the second quarter of 2008.

It is the worse quarterly loss Triad has had since June 2008, when the national housing crisis claimed the company as its first major victim in the mortgage-insurance business.

The company said at that time that it would discontinue writing new mortgage-insurance business and conduct "an orderly transition of its business to runoff."

That means the company's revenue would come from existing policies that eventually will expire. The company has said that it expects to exist for another four to nine years.

Triad reported an earnings loss of $23.91 a share, compared with a loss of $3.68 in the first quarter and a loss of $13.36 a year ago.

The company issued its report after the stock market closed yesterday. Its share price dropped 9 cents to finish at $1.36.

But in limited after-hours trading, the share price fell 51 cents, or 37 percent, to 85 cents.

The company said that losses regarding settled claims were at $149.9 million in the quarter, compared with $68.3 million a year ago.

Part of the increase came from more loans from 2006 and 2007 completing the foreclosure process.

Triad's loss reserves rose to $278.9 million compared with $218.5 million a year ago.

The company, as well as current and former top executives, is facing a class-action lawsuit by stockholders claiming that the officials violated federal securities laws.

Stockholders affected are those who bought the common stock of Triad from Oct. 26, 2006, when the share price was $53.27, through April 1, 2008, when the share price was $2.28.

The company said in a regulatory filing yesterday that an amended complaint was filed June 22 in U.S. District Court for the Middle District of North Carolina.

The company has until Aug. 21 to respond to the complaint.

Triad has cut at least 100 of its 250 jobs since June 2008.

Tony Plath, a finance professor at UNC Charlotte, said that it is likely that Triad Guaranty's work force will continue to shrink as its loan portfolio decreases.

But according to the filing, the company said it still has 150 employees.

Richard Craver can be reached at 727-7376 or at rcraver@wsjournal.com.

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