Yet Another New MI Being Formed
Washington-The mortgage insurance industry has a long way to go before its future starts looking bright again, but that hasn't stopped a second group of MI executives from laying the groundwork to start a new insurer.
According to MI officials and other industry sources, former executives from Triad Guaranty, Verex Corp. and CMG Insurance Group are forming a new company. If it comes off, it would be the second new guarantor to emerge within the past year.
The other new MI is Essent Guaranty of Philadelphia, which hopes to begin writing coverage in the first qurter.
Little is known about the effort by the former executives of Triad, Verex and CMG, except that the working name of the company is MAC (Mortgage Assurance Corp.) and it has begun hiring employees. (Verex was once owned by Greyhound, a bus company which sold off its assets about 20 years ago.) MAC likely will be headquartered in Wisconsin, North Carolina or Pennsylvania, said one MI executive familiar with the company. When asked why those states, he replied, "Because insurance regulators understand the business."
Most of the nation's seven MI firms continue to lose money but are showing signs of improvement amid declining coverage. Their share prices have bounced considerably since their lows. (Genworth, though, has other businesses besides MI.) MI firms are swamped by claims and are having trouble raising capital to write new business. All have cut back on loan types they will guarantee, putting tight restrictions on broker-sourced mortgages and condominiums. As the fortunes of the MIs wither, the FHA program has boomed to new highs.