NEW YORK (Bloomberg) - American International Group Inc. (AIG), the insurer bailed out after derivatives losses tied to housing, is being weighed down by unprofitable units that originate and guarantee US mortgages.

The businesses caused a combined $2.5 billion in 2009 operating losses for New York-based AIG, 22 percent narrower than a year earlier, the company said last week. AIG's consumer lender American General Finance posted a $309 million operating loss in the fourth quarter when mortgage insurer United Guaranty's operating loss was $241 million.

AIG, once the world's largest insurer, received a $182.3 billion bailout package that included aid in November 2008 to retire derivatives tied to US home loans. The Financial Products unit that sold the contracts will be shuttered this year, AIG said. The rescue did not stop the bleeding from the company's other businesses tied to housing.

"There's a variety of different ways AIG is still exposed to the trends in housing finance," said Bill Bergman, an analyst at Morningstar Inc. in Chicago. "Those trends are improving, but it's still a meaningful amount to lose."

CEO Robert Benmosche plans to retain United Guaranty and provide funds to American General Finance even as AIG auctions assets to repay taxpayers. Mark Herr, an AIG spokesman, declined to comment.

AIG said it would support American General Finance, which lost access to its usual sources of funding after the bailout, through February 2011. The Evansville, Indiana-based lender has shut offices, cut jobs and sold receivables.

Benmosche decided to keep Greensboro, North Carolina-based United Guaranty after selling Canadian and Israeli subsidiaries of the unit, Moody's Investors Service analyst Arlene Isaacs- Lowe wrote last month.

"New business being written is more conservatively underwritten and with higher pricing," Isaacs-Lowe said in an interview. "There's a newer book that should be highly profitable."

The mortgage industry's outlook is "much better than it's ever been," said Matt Howlett, an analyst at Macquarie Group Ltd. "Portfolios' delinquencies are slowing."

Mortgage insurers, which pay lenders when homeowners default and foreclosure fails to recoup costs, faced higher claims as housing prices fell and job losses mounted. Lenders repossessed 2.82 million houses in 2009 and are expected to foreclose on three million more this year, according to RealtyTrac Inc.

That is the most since the Irving, California-based seller of default information began compiling data in 2005.

Benmosche's predecessor, Edward Liddy, had said that it would be difficult to find a buyer for United Guaranty. "If something emerges and someone wants to buy it, we'd be delighted to entertain it, we just don't think that will happen," Liddy said in a phone interview on October 3, 2008.