Radian Group Inc. (NYSE: RDN) shares jumped 25% to $3.85 after the mortgage insurer reported swinging to a profit in the second quarter. Volume for the stock closed in on 7.5 million shares by 11 a.m. ET, towering over an all-day average of below four million.

The company put out a news release August 2, announcing that net income for the quarter ended June 30, 2011 was $137.1 million, or $1.03 per diluted share, which included combined gains from the change in fair value of derivatives and other financial instruments of $193.8 million. This compares to a net loss of $475.1 million, or $4.31 per diluted share, for the prior-year quarter, which included combined net losses from the change in fair value of derivatives and other financial instruments of $587.8 million. Book value per share at June 30, 2011, was $8.48.

In the same release, Radian CEO S.A. Ibrahim noted, “As we face an uncertain U.S. economy and housing market, we believe that Radians risk-to-capital ratio of 19.8 to 1 and the financial flexibility of our holding company cash position provide a competitive advantage for our mortgage insurance business. We were pleased with the continued drop in mortgage insurance delinquencies in the quarter and another period of operating profitability for our financial guaranty business.”

Radian Group Inc., headquartered in Philadelphia, provides private mortgage insurance and related risk mitigation products and services to mortgage lenders nationwide through its principal operating subsidiary, Radian Guaranty Inc. These services help promote and preserve homeownership opportunities for homebuyers, while protecting lenders from default-related losses on residential first mortgages and facilitating the sale of low-down-payment mortgages in the secondary market.