Aug. 27 (Bloomberg) -- Triad Guaranty Inc., the Winston-Salem, North Carolina-based mortgage insurer, borrowed $80 million from a credit line to preempt any cash shortages amid rising defaults on U.S. home loans.

The company tapped the funds ``in light of current market conditions,'' Triad said in a regulatory filing today. The insurer said it has the option to increase its credit line by $20 million.

Triad shares have fallen 54 percent this year, compared with the 4 percent gain in the Standard & Poor's Smallcap 600 Index, as mortgage foreclosure filings in the U.S. jumped 58 percent to 573,397 in the first half, according to Irvine, California-based RealtyTrac Inc. Mortgage insurers protect lenders from borrower defaults.

``We're seeing an increase in defaults in Florida and California along with the rest of the industry, but this is more to demonstrate our financial flexibility than to meet any immediate need,'' Triad Chief Financial Officer Ken Jones said in an interview.

The company placed the funds in short-term investments, the filing said.

To contact the reporter on this story: Erik Holm in New York at eholm2@bloomberg.net.

Last Updated: August 27, 2007 17:32 EDT