PMI Group Inc. (NYSE: PMI) is one of those companies which borrowers hate because they feel it is insurance on top of insurance. Shares of PMI are soaring this morning on word that Freddie Mac (NYSE: FRE) approved the company as an Eligible Mortgage Insurer… PMAC will be able to write new mortgage insurance business in certain states in the event that PMI Mortgage Insurance is required to cease writing new mortgage insurance business in those states due to its inability to meet applicable regulatory capital requirements. FRE’s approval is subject to certain conditions and restrictions but this will remain in effect until December 31, 2011. Fannie Mae (NYSE: FNM) had already approved PMAC as a direct issuer of mortgage guaranty insurance. In short, PMI gets to demand tough terms on borrowers and those getting new mortgages today are deemed the higher credit category. PMI Group shares are up 16% at $3.66 on 3.3 million shares as of 9:55 AM EST. The average volume is only 3.6 million shares and the 52-week trading range is $0.60 to $4.96. Fannie Mae is up 2.75% at $1.12 and Freddie Mac is up 1.5% at $1.31 ahead of a testimony today.
JON C. OGG