Mortgage Insurer PMI Warns of Shutdown
Mortgage insurer PMI Group Inc. warned Thursday that it could be forced to stop selling new coverage, sending shares plunging.
PMI, which has reported about $3 billion in losses since the fourth quarter of 2007, said a backup plan intended to allow the company to stay open for business if its primary subsidiary falters had “no assurance” of continuing to work.
That backup plan gained importance when PMI reported Thursday that its primary subsidiary had missed key capital-adequacy targets in the second quarter. The subsidiary is likely to be shut down by its primary regulator in Arizona if it is unable to “obtain significant capital,” or at least outline a credible plan for doing so, Chief Executive L. Stephen Smith said on a conference call with investors.
Obtaining such capital will be “very challenging to achieve,” Mr. Smith said.
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4closureFraud.org
Here again, the MI companies refused to work with the borrower to advance partial payments suffcient to assure the homeowner could continue to make his payments until his hardship had been resolved. We tried this in the 80’s and it worked beautifully. For those homes whereby the MI comanies made the partial advances, if the hardship not resolved and the home eventually went to foreclosure, then in that event, the loan servicer would only have received the amount of the claim once the foreclosure took place, less the amount of the advanced partial payments. This comment begs the question – why did the servicers and/or the mi companies not permit this temporary resolution. Had they done so, modifications and the nightmare and cost of getting one, would never have been necessary.
I cannot understand why those of us who went through the 80’s and 90’s were not asked to sit in with the powers that be so we could have worked out arrangements that would have prevented the trickle down effect of the industry as a whole.
The MI company would possibly have been in far better shape and their cash flow of monies could have been sustained for a longer period of time. What unnerves me is the fact, that although the PSA agreements and MLPA were in place, why there was ot a provision for immediate adjustments to the contract for certificate holders. Why? because it was not the agenda for Wall Street and/or the Banks and their loan servicers. I do not believe the Prospectus and PSA had such a provision – sort of like a “drop dead” clause which means, there has to be an immediate change in your investment – That is a very tough call I know, but this way, the alledged investors are going through an awful lot to recover their investment and God help us as far as the homeowner who legitimately thought he was doing the right thing. Maybe so any A paper homeowners would not have lost their jobs. Mi is not a subprime product, but lenders did purchse insurance through special subprime MI companies which the lender supposedly pays for out of its own funds. Not sure about that, had to be factored into the interest rate or some other cost item, but that MI insurance was not normally disclosed as most sub prime borrowers did not know it had been ordered.
At any rate, just a suggestion – but just a little too late. Should have gone with the intiial plan we had in 2006-07
@ joyce back in the 80-90’s most banks held the mortgage on their books. if you called with a hardship they work with the homeowners. remember it use to take almost 2 months to close back then? i remeber having the seller calling me to find out whats going on. back then they actually checked out your income with your job and actually checked that the appraisal was with in under writing standards. with the relaxation of both or i should say the banks did not keep these loans or even ever own them, they never were lending the money they didnt care. all they wanted was borrower to sign the deal. because the tilte company already had the money in the escrow account and when we signed everyone got paid. investors paid alot more then the actual mortgage. if we did not sign the money wnet back to the investor. we all need to check with our title companies. they were in on it. the actual lenders were not on our mortgage and note. only the “pretender lender” so these mortgages ar enull and void anyway. we need to stop complaining to each other and write all the government entities that we are on to these bogus mortgages. joyce i had great western bank back then. had to deffer my mortgage payment twice because i could not pay. not one time ever did i fear foreclosure back then. fast foward to 2009 i asked for help and BAM the downfall of my life. actually a blessing. imagine paying life time to find out it was all fraud.
so peopel lets get to work. lets write all the AG’s lets expose that we already know. the banks are hoping that 95% know nothing foreclose or continue paying . 2 1/2% continue to ask fo rthe note, assignments, psa ect then other 21/2 % us who know there was fraud in the origination. we need to get this out before we all go homeless
All that you say is true. I was around then and worked for many mortgage bankers and loan administration divisions as a managerial person. Liason for Fannie and the VA and even wrote a book about what went on in the 80’s and 90’s, how Fannie was the best of the best during that time and now, we have the demise of the housing industry. Again, all that you say is true .
I, along with many others have begged people to take a stand. The people I am talking about are the 95% who have no intentions of coming to the resscue of those who got caught up in this fiasco and because these 95% have not done so, the will suffer the loss of the rule of law and more than likely, little restitution will be paid to those that have been harmed, not to mention that it could happen again in their own back yard.
45 years in the business and I have worked with virtually every aspect of the housing market and it was once a great great situaton – now – it is nothing but corrupt with just a very few calling the shots and controliling the industry. The AG’s do not wish, nor does the feds wish, to do anything about what they know for a fact has happened and what is still happening. It has gone too far and beause the 95% would not step up, we are looking at a major catasphy when we lose the rule of law that once protected us as American citizens and so forth.
Good luck to you always.
Hey, PMI – look, up in the sky —- Is it a plane, a rocket, a bat? Nooooo – its an OWL!!!! Karma and the Universe are working, and I’m soooooo happy!!
Cue the laughing mouse……