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Mortgage Insurer PMI Group May Have to Stop Selling Policies, Could Close

Mortgage insurer The PMI Group Inc. warned investors on Thursday that it may be unable to continue selling new policies and could shut down... the company's main subsidiary, PMI Mortgage Insurance Co., or MIC, doesn't have enough money on hand to meet the requirements of regulations in Arizona, where it is based.

The company said the state's insurance department may as a result move to stop it from selling new policies in all states and move to rehabilitate or liquidate the unit... Like other mortgage insurers, PMI has been able to sell profitable policies in recent years, but the gains from those sales hasn't outpaced losses from policies sold during the bubble. Compounding the issue is a sharp rise in the number of previously denied claims that banks appealed and were able to get reinstated by producing better documents to back up them up...

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