The company also slashed its quarterly dividend 76% as the nation's largest mortgage insurer looks to conserve capital.
PMI reported a net loss of $1.01 billion, or $12.51 a share, compared with prior-year net income of $100.5 million, or $1.19 a share.
The latest results include $776.1 million in after-tax losses due to the company's equity in Financial Guaranty Insurance Co., and a loss of $236 million in PMI's U.S. mortgage insurance operations amid an increased reserve for losses.
Revenue edged down 0.2% to $281.5 million.
FGIC -- in which PMI has a 42% stake -- resulted in a $776.1 million after-tax loss for PMI as a result of higher losses and loss-adjustment expenses. PMI said last week that it expected to the segment to have "significant" loss driven by FGIC. The release of PMI's results had been postponed several times in the past month due to delays in obtaining results from the bond insurer.
FGIC, the fourth-largest bond insurer, has lost its key AAA rating from all three major ratings firms on worries it might fail to raise $1 billion in capital to cushion possible losses on complex securities that have plunged in value.