News for Prescott AZ - AmericanTowns.com

Monday, August 22, 2011

PMI Customer Announcement

 

Big announcements twice in one day.  PMI will no longer be issuing mortgage insurance certificates effective immediately.

 

If ANY of you have a transaction in process (regardless of the lender) please make sure your lender has a MI certificate in place

so you do not have any delays in your closings.  Heads up!

 

To Our Valued Customers:

We are writing to inform you of the very recent regulatory decisions that have impacted our ability to write new commitments. Specifically, PMI Mortgage Insurance Co. (“PMI”) and PMI Mortgage Assurance Co. (“PMAC”) have been informed that they must cease writing new commitments for insurance effective as of the close of business on August 19, 2011. PMI and PMAC may issue mortgage insurance policies under pending commitments through the close of business on September 16, 2011.

We regret that we were not able to grant you a more favorable notice period. However, we were uncertain until yesterday how long the notice period would be, and we were not in a position to communicate with you earlier. We would also like to take this opportunity to provide you with additional information regarding our policy servicing, claims operations and investor requirements within this letter.

Policy Servicing & Claims Operations

While PMI and PMAC are no longer able to continue to write new insurance, we will support our customers’ ongoing policy servicing needs and loss mitigation programs. PMI will maintain all systems, processes, and contact points for policy servicing, loss mitigation, and claims operations just as we do today. Please continue to use the same contact numbers for your sales and operational representatives at PMI. 

Timing and Investor Requirements

As we are only authorized to issue new commitments until the close of business today, investor acceptance and deadlines will likely differ from our regulatory approval. We expect the GSEs to communicate mandatory delivery dates of PMI or PMAC issued certificates shortly. We encourage customers to review investor delivery requirements directly with them. 

As stated in our second quarter earnings release of August 4, 2011, PMI is considering a number of alternatives, including attempting to move production of new business to a separately capitalized mortgage guaranty insurance subsidiary. We are actively pursuing this alternative with the GSEs, FHFA, and the Arizona Department of Insurance. At this time we have not yet secured approval of this plan, and we may not be able to execute such a plan.

We are pursuing these discussions as a solution to the long term continuity of the mortgage insurance business. Since the mortgage crisis began, it is unfortunate for the mortgage industry to now witness the third mortgage insurance company to cease writing new business. As a company completely dependent on private capital, we have had to stabilize our company through extensive internal and external capital initiatives. It is our sincere hope that private capital will again prevail to strengthen this industry.

PMI remains committed to the mortgage insurance business model and the important role that private capital plays in the nation’s housing finance system. We appreciate the trust and confidence that you have placed in PMI for nearly 40 years and we hope we will have the opportunity to work with you again. 

If you have additional questions or concerns, please contact your PMI Account Manager or you may call us at 1-800-966-4764.

Best Regards,
 
David H. Katkov
Executive Vice President & Chief Business Officer

 

 

 

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