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PMI Group Units Forced to Stop Writing New Insurance

PMI announced - "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."

Freddie Mac and Fannie Mae response - "Effective immediately, we are suspending PMI and its wholly-owned subsidiaries as approved mortgage insurers. With this suspension, mortgages insured by PMI with note dates before May 19, 2011, or after September 16, 2011, will no longer be eligible for sale to Freddie Mac. To help manage your pipeline, mortgages insured by PMI with note dates on or after May 19, 2011, and on or before September 16, 2011, must be delivered to Freddie Mac on or before December 30, 2011, whether for borrower-paid or lender-paid insurance."

CitiBank quickly spread the word to clients. "In order to meet the deadlines set by PMI's regulator, Citi is requiring any loan insured by PMI be purchased by Citi no later than September 2, 2011. Reminder:  Payments for any single premium MI policies must be submitted to PMI immediately upon loan closing."

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