Az Seizes PMI Group: Orders Stop to Paying on PMI Mortgage Insurance

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EDITOR’S COMMENT: Well here is one insurer that won’t pay the Banks and won’t get federal bailout to do it. This Arizona Group simply doesn’t have the money to pay out on claims. Remember that the Government bailed out AIG so it could pay 100 cents on the dollar to Goldman, Chase, BOA, Citi, Credit Suisse et al. Now the company is saying the most they will is 50 cents on the dollar and there is a veiled threat that they won’t pay anything.Expect other Private Mortgage Insurance companies to do the same. This used to be a highly profitable add-on to mortgage expense that significantly added to the monthly payment and was required by most lending institutions.

Who is getting this money? What due diligence has been done to determine who gets this money. In the previous post I show that the parties foreclosing are basically a fictitious name without any legal existence — so there is nobody to counterclaim against because there is nothing but thin air to fight against. If you are fighting for your life and home in court you are probably fighting against an entity that has no greater legal existence than Donald Duck.

By using a phrase instead of a name of an actual entity, they create the appearance of an entity, especially when the phrase starts out with the name of a Bank that is not acting as a party to the transaction or foreclosure. It’s the ultimate asset protection plan for the Banks —we can sue you, we can take your property, your title and evict you and if we do it wrong, lie or commit outright fraud, you can sue a non-existent entity with no assets.

Judge Stephens in Missouri had no trouble in seeing through this ruse. When you get right down to it, virtually every entity involved in the mortgage origination right through the foreclosure was either a completely fictitious entity or a nominee or unauthroized agent for a fictitious entity. PMI insurers would do well to sit up and take notice that they were scammed. They should refuse to pay any amount to anyone unless the recipient proves that they are in fact the creditor.

By forcing the Banks into court to prove that point, they probably won’t have any takers. Because none of the Banks are the creditors and they know it. But they are very willing to take money from PMI carriers if they can get it. It’s another example of how the servicers and banks are acting against the interests of investors.

Oct. 23 (Bloomberg) — PMI Group Inc., the mortgage insurer that was ordered in August to stop writing policies, said a unit that sells such coverage was seized by Arizona authorities and will pay out claims at 50 percent starting tomorrow.

The Arizona insurance regulator has full possession, management and control of the unit, PMI Group said in a statement on its website. Bill Horning, a spokesman for PMI, didn’t respond to a message seeking comment.

In August, the Arizona Department of Insurance told PMI that the unit, PMI Mortgage Insurance Co., was to halt sales of new policies and stop making interest payments on $285 million in surplus notes. PMI, which is based in Walnut Creek, California, said it needed to provide the regulator with a plan to improve its ability to meet policyholder obligations.

“The department may take appropriate action, including commencing conservatorship proceedings” if PMI fails to satisfy regulators’ demands, the company said on Aug. 19.

That same month, PMI Group posted its 16th straight quarterly loss.

The worst U.S. housing crash in seven decades has pressured mortgage insurers, which pay lenders when homeowners default and foreclosures fail to recoup costs. Home prices fell 3.3 percent in the 12 months through July as a U.S. unemployment rate of more than 9 percent sapped the confidence of potential home buyers.

Most Profitable

Until 2007, private mortgage policies had been among the most profitable types of coverage sold by insurers. From 2000 to 2006, members of the Mortgage Insurance Companies of America reported a profit margin of at least 35 cents for every dollar they collected in premiums.

MGIC Investment Corp., the largest U.S. guarantor of home loans, reported a wider third-quarter loss on Oct. 21 as the cost of claims from mortgage delinquencies rose.

PMI shares have fallen 91 percent year to date, and traded at 31 cents on Oct. 21 in New York before the stock was halted.

–Editors: Sylvia Wier, Joe Sabo

To contact the reporters on this story: Mike Millard in Seattle at Mmillard2@bloomberg.net; Noah Buhayar in New York at nbuhayar@bloomberg.net

To contact the editor responsible for this story: Sylvia Wier at swier@bloomberg.net

Tags: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, PMI, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND
Posted in bubble, Corruption, Eviction, securities fraud |