PMI Files Bankruptcy Following Ariz. Regulatory Takeover
PMI, which with CUNA Mutual Group created CMG Mortgage Insurance in 1993, filed for Chapter 11 bankruptcy protection Nov. 23.
Kim Shaul, senior vice president and general manager of CMGMI provided this emailed statement to Credit Union Times, “The bankruptcy filing affects the holding company for PMI. CMG Mortgage Insurance Company is a joint venture between PMI's mortgage insurance company and CUNA Mutual. The filing will have no impact on the day-to-day operations of CMG MI.”
Last month the Arizona state insurance regulators took over operations of PMI.
Bloomberg reported PMI Group Inc. filed for bankruptcy protection after the mortgage insurer lost a court bid to undo the takeover of PMI Mortgage Insurance Co., by Arizona regulators.
According to The Wall Street Journal, Judge Richard Gama of Arizona's Superior Court released an order finding with state regulators, saying PMI's mortgage subsidiary is "currently insolvent." It added that forecasts couldn't be relied on because its "loss projections have been off by at least 35% every year for the past three years." PMI is still working to reach a deal with regulators to keep writing new insurance policies, according to court papers.
A hearing is scheduled for Jan. 10 in Arizona to appoint the receiver to take over the mortgage insurance unit, according to WSJ.