Arizona regulators this week seized control of the troubled mortgage insurance division of PMI Group, Walnut Creek, Calif., according to a notice posted on the company's website.
A Superior Court judge approved an order on Oct. 20 that gave Arizona director of insurance Christina Urias “full and exclusive power of management and control of PMI,” including the power to stop or limit the payment of claims.
Effective Monday, October 24, “claim payments will be made at 50%, with the remaining amount deferred as a policyholder claim,” PMI said.
Two months ago, Urias placed PMI under supervision and directed the insurer to stop issuing new mortgage commitments at the close of business on August. 19.
According to figures compiled by National Mortgage News and the Quarterly Data Report, PMI ranks second nationwide in terms of policies-in-force with $123 billion of coverage. (The ranking is based on seven MI firms but excludes Essent, which began writing policies about a year ago.)
With this latest development, PMI appears to be one step away from receivership. Nevertheless, the insurer says it will continue to support its customers.
“We will continue to support our customers' ongoing policy servicing needs and loss mitigation programs,” the company said in a statement. “PMI will maintain all systems, processes, and contact points for policy servicing, loss mitigation, and claims operations just as we do today.”
On Friday, PMI's share price closed at 30 cents compared to a 52-week high of $4.47 and a low of 15 cents.