The race is on among American mortgage insurers to claim a stake in the European mortgage market.

On Tuesday PMI Group Inc. of San Francisco started a Dublin unit, PMI Mortgage Insurance Co. Ltd., that offers a variety of primary mortgage credit enhancement products to European lenders and securitizers.

The same day, Radian Group of Philadelphia said it had entered an exclusive agreement with the New York investment bank AGS Financial LLC. The deal, it said, will help it break into Europe and other international markets for credit enhancements on mortgage-backed securities and other structured transactions.

These moves come after years of sluggish migration by the mortgage industry in general. Despite a widely held belief that growth in the business must come from international markets, only a handful of U.S. mortgage-related companies have established European outposts.

PMI and Radian will join Countrywide Credit Industries Inc. of Calabasas, Calif., HomeSide International of Jacksonville, Fla., GE Mortgage Insurance Corp. of Raleigh, N.C., and Electronic Data Systems Corp. of Plano, Tex., in setting up European operations. A spokesman for General Electric unit said it is already operating in the U.K. and Poland, and that it is "evaluating ways to expand across continental Europe to offer both mortgage insurance solutions and credit enhancement solutions."

There may be room for all of them. Industry experts say the European mortgage market is enormous and underserved, and PMI officials estimate the volume of outstanding mortgage debt in the European market at well over $3 trillion, about 70% the size of the American market.

Moreover, PMI said, mortgage insurance is only sold in two European Union countries: the United Kingdom and Ireland. And industry experts say that homeownership rates in most of Europe remain lower than in the United States.

Most U.S. companies have, nonetheless, gone into Europe's mortgage market cautiously, first offering servicing or securitizations support. Countrywide entered the U.K. market in 1999 as a servicer through a partnership with Woolwich PLC, a British bank and mortgage lender, and in December opened a unit to purchase, securitize, and sell U.K. mortgage loans. HomeSide has established a start-up in the U.K. that is now evaluating the market.

EDS inked a deal Tuesday to service the mortgages and personal loans of Abbey National PLC, one of the largest mortgage lenders in England.

PMI has operations in New Zealand, Australia, and Hong Kong, said Glenn Corso, a spokesman for the company. But Europe's lending industry is more fully developed than in most of Asia, he said, making Europe a more attractive place for PMI to establish new business.

Mortgage securitization "is likely to grow faster in Europe than in Asia and that growth will create market opportunities for PMI in the near term," Mr. Corso said.

Radian is also targeting the securitization business, said chairman and chief executive Frank Filipps, for the same reason - but also because traditional mortgage insurance does not exist in continental Europe. It probably will not evolve, he said, before a good secondary market for mortgage-backed securities emerges there.

The company's deal with AGS, an international mortgage banking, investment banking, and consulting company that provides research, data, and contacts in the international mortgage banking world, will help it find opportunities to credit-enhance securitizations and existing whole-loan portfolios, Mr. Filipps said.

United Guaranty of Greensboro, N.C., and MGIC Investment Corp. of Milwaukee have been looking into European market for some time. Both said the biggest challenge in expanding there is dealing with vastly differing laws and mortgage systems.

Paul Imura, vice president of corporate development at United, said that the many different markets, homeownership patterns, and housing finance systems in Europe require customized product development coupled with sound risk management, which United is now researching.

MGIC vice president of corporate development Lou Vellner said that "despite there being a common currency and the ability to do insurance business" in all the EU countries, they have different regulations governing property rights. "You still have to look at each country separately," she said.

Claude Seaman, executive vice president, strategic investments of the PMI Group, agreed that this is the only valid approach. He said his company has been "working on understanding the uniqueness of every country. We can't assume that we can treat every country in Europe with the same set of products and services."

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