PMI Eyes Canadian Loans
PMI Mortgage Insurance Co. here, already with offices outside the U.S. in Australia, New Zealand, Hong Kong and Europe, is looking north of the border for its latest international market.
The company has filed an application with Canada's Office of the Superintendent of Financial Institutions.
"We view Canada as a very attractive, dynamic, mortgage market," said Glenn Corso, group senior vice president for PMI.
Among its competition is a government agency, the Canada Mortgage and Housing Corp., as well as Raleigh, N.C.-based Genworth Mortgage Insurance Corp. CMHC has the largest market share.
Mr. Corso said PMI has been observing how well Genworth has done in the Canadian marketplace. In addition, he noted there are similarities between the Australian market in which PMI currently operates in and in Canada. PMI also competes with Genworth in Australia.
PMI provided statistics from a survey done by the Canadian Institute of Mortgage Brokers and Lenders, which shows that 69% of the market up there has a fixed-rate mortgage, although variable-rate mortgages are gaining market share.
The mortgage insurance product itself is different in Canada than it is in the U.S. It is required on loans where there is a downpayment of less than 25%. In addition, while in the U.S., the mortgage insurer only covers 25% of the loan balance, in Canada, it is 100%, Mr. Corso pointed out.
Another difference between the two markets is that most mortgages in Canada amortize over a 25-year period.
PMI has already opened a small office in Toronto to serve as its base of exploration.
PMI is not the only U.S.-based mortgage insurer looking north. AIG United Guaranty, Greensboro, N.C., is actually several steps ahead of PMI, having filed its application with government regulators last November.
It already has hired Andy Charles as president of AIG United Guaranty Canada, and is awaiting regulatory approval, which it expects to receive sometime later this year. (c) 2006 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com