WALNUT CREEK, Calif. – CMG Mortgage Insurance Co. on Monday said last week’s bankruptcy filing by PMI Group – a 50%-50% partner with CUNA Mutual Insurance – will not affect the claims-paying ability for the biggest provider of private mortgage insurance for credit unions.
“The bankruptcy filing affects the holding company for PMI,” said Kim Shaul, senior vice president and general manager of CMG. “The filing will have no impact on the day-to-day operations of CMG MI.”
PMI, the nation’s biggest provider of private mortgage insurance, filed for Chapter 11 bankruptcy protection Wednesday after an Arizona judge rejected its bid to overturn the October seizure of its mortgage insurance unit by state regulators.
Throughout the travails of PMI, officials for CUNA Mutual have sought to reassure credit unions about the claims-paying ability of its 18-year-old joint venture on mortgage insurance for credit unions, asserting that the venture is well-capitalized and a separate entity.
PMI sought protection from its creditors in the U.S. Bankruptcy Court in Wilmington, Del., listing assets of $225 million and debts of more than $736 million. PMI has seen its business deteriorate along with the U.S. housing market.
Yesterday Standard & Poor’s downgraded its rating on PMI bonds to junk, noting PMI's $685 million of senior unsecured notes and $51.5 million of junior subordinated notes have become due and payable as a result of the bankruptcy filing.
