CUNA Mutual Group assured credit unions Monday that its CMG Mortgage Insurance joint venture remains financially viable and can pay claims despite the financial troubles of its joint venture partner, PMI Group, San Francisco.
PMI was taken over by state regulators in Arizona last week and is no longer writing new policies. PMI's ability to pay full claims is now seriously in doubt.
“In addition to the company's solid operating performance and financial strength, CMG MI continues to enjoy the strong support from its joint venture partner CUNA Mutual Group,” said Sean Dilweg, vice president of CUNA Mutual Group. “CMG MI will continue to benefit from CUNA Mutual's management and financial strength as well as PMI's ongoing operational services and expertise. The company is committed to serving credit unions over the long term.”
CUNA Mutual emphasized that the biggest provider of mortgage insurance for credit unions remains financially strong despite the action by the state insurance regulator.
CMG, which is 50% owned by CUNA Mutual and 50% by PMI, has a 60% market share among credit union mortgage funders.
The Arizona Department of Insurance took control of PMI, ordering the company to pay claims at 50 cents on the dollar after losses on mortgage defaults drained its capital. The operation was already prohibited from selling new coverage after 16 straight quarterly losses.
PMI Mortgage is incorporated in Arizona but headquartered in Walnut Creek, a suburb of San Francisco.
