Nov. 1 (Bloomberg) -- GMAC LLC and Radian Group Inc. disclosed more than $2 billion in third-quarter losses tied to mortgage lending, adding to evidence that the worst U.S. housing slump in 16 years is deepening.

GMAC, the home and auto lender formerly owned by General Motors Corp., said today it had a $1.6 billion loss on lower demand for mortgages and higher provisions for failed loans and impaired assets. Radian, the third-largest U.S. mortgage insurer, reported a $703.9 million loss after writing off $468 million on a unit that invested in subprime mortgages.

``If you're directly exposed to the housing market, there's been a massive downturn,'' Rob Haines, analyst at CreditSights Inc. in New York, said in an interview. ``The weakness in housing is affecting all mortgage-related companies and it doesn't look like it's getting better.''

Dropping home prices and record U.S. foreclosures have roiled companies that originate and invest in mortgages and the securities they are packaged into. The fallout spread to insurers including MetLife Inc. and Conseco Inc., which both reported late yesterday that subprime holdings hurt results. Ambac Financial Group Inc. tumbled 20 percent after its bonds were downgraded, and American International Group Inc. fell the most since April 2005.

Radian, based in Philadelphia, fell $1.71, or 14 percent, to $10.88 in New York Stock Exchange composite trading. MGIC Investment Corp., the largest U.S. mortgage insurer, declined $2.25, or 12 percent, to $17.11. The Milwaukee-based insurer last month announced its first quarterly loss as a publicly traded company.

AIG, Countrywide

Washington Mutual Inc., the largest U.S. savings and loan, fell 7.6 percent. Countrywide Financial Corp., the biggest U.S. mortgage lender, lost 7 percent. MetLife slipped 4.8 percent and Conseco dropped 10 percent, the most since emerging from bankruptcy in 2003. AIG, the world's largest insurer, fell 6.1 percent. GMAC is majority owned by a buyout group led by New York-based Cerberus Capital Management LP.

GMAC's results included a $2.3 billion loss at its Residential Capital LLC mortgage unit.

``We are moving aggressively to restructure our real estate finance business as weakness in the housing market and mortgage industry continues to prevail,'' GMAC Chief Executive Officer Eric Feldstein said in a statement.

ResCap's loss stemmed from a higher provision for credit losses, fewer new loans and markdowns on the value of its securities and loans held for sale. The loss included a $455 million impairment charge, the company said.

Assurant, Radian

Assurant Inc., which sells property insurance to banks to protect homes after they've gone to foreclosure, was the second- best performer in the Standard & Poor's 500 Index today. Profit climbed 24 percent to $187.2 million in the quarter as the company benefited from the housing slump. The New York-based company rose $3.56, or 6.1 percent, to $62. The top gainer was Unum Group, the largest U.S. disability insurer.

Credit-Based Asset Servicing and Securitization LLC, the joint venture between Radian and MGIC, bought delinquent subprime mortgages, aiming to get collections back on schedule and sell the debt at a profit. On July 30, the companies said their investments in C-Bass might be worthless as demand for the loans was drying up.

Default Rates

Radian, the biggest loser this year in the 224-member Russell 1000 Financial Services index, is paying more to bail out lenders from bad loans. Homeowners with private mortgage insurance defaulted on 22 percent more loans in September than a year earlier, according to an industry trade group.

``Mortgage insurance credit losses will continue to impact our results for the foreseeable future,'' Chief Executive Officer S.A. Ibrahim said in a statement today.

First American Corp. the largest U.S. title insurer, said today that third-quarter profit fell 48 percent to $46.6 million as demand for new mortgages fell. The company, based in Santa Ana, California, gained 40 cents to $30.50. The stock has declined 25 percent this year.

The slowdown in U.S. home sales is crimping demand for title insurance, which protects homebuyers from claims against their ownership. Fidelity National Financial Inc., the second-largest title insurer, said last week that quarterly profit plunged 95 percent to $6.5 million. LandAmerica Financial Group Inc., the No. 3 title insurer, had a $20.8 million loss.

MetLife, the largest U.S. life insurer, said the housing slump and resulting turmoil in credit markets led to losses on its holdings in hedge funds and collateralized debt obligations backed by subprime home loans.

MetLife

MetLife lost $25 million from its $1.8 billion of investments in 25 hedge funds in the third quarter, Chief Investment Officer Steven Kandarian told analysts on a conference call today. The New York-based company had another $47 million of losses linked to investments in homebuilders and CDOs.

AIG has units that originate, insure and invest in home loans. A Friedman, Billings, Ramsey & Co. analyst estimated Oct. 25 that the company may write down as much as $9.8 billion of subprime holdings. The insurer, based in New York, is scheduled to report third-quarter results Nov. 7.

Ambac bonds were downgraded to ``deteriorating'' from ``stable'' by Gimme Credit Publications Inc. because of the world's second-largest bond insurer's risk from CDO obligations. Ambac has insured about $29 billion of CDOs whose assets are more than a quarter mortgage-backed securities, ``relatively more'' than competitor MBIA Inc., bond research firm Gimme Credit said in a report today.

To contact the reporter on this story: Hugh Son in New York at hson1@bloomberg.net;

Last Updated: November 1, 2007 16:52 EDT