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CU System
Delinquencies affect CMG Mortgage Insurance Co. rating
NEW YORK and MADISON, Wis. (12/31/09)--Like other institutions in today's economy, CMG Mortgage Insurance Co. (CMG MI) has seen an increase in prime delinquencies. That has affected its ratings, but the company continues to lead with a strong performance in its niche marketplace, says a ratings firm. Fitch Ratings announced it has adjusted the insurance company's rating to BBB from A+ primarily because of increasing prime delinquencies and their potential impact on capitalization. However, CMG's primary default rate "remains well below that of all of its peers," said Fitch's report, attributing the "stronger performance, in part, to CMG's role as a niche player, catering to the unique origination channels within the credit union space." "Despite challenging times for the mortgage industry, CMG MI exhibits the best-performing portfolio for the private mortgage insurance industry in the U.S.," said Joe Dillon, senior vice president and general manager of CMG MI. "Fitch acknowledges that we continue to out-perform our peers, thanks to the high quality of credit union originations. "We appreciate our customers' support and we will continue to be a reliable counterparty, as well as one of the highest rated private mortgage insurers in the U.S.," he added. Fitch said that it reduced the rating because it believes that additional capital is unlikely from either of CMG MI's parent companies, PMI Mortgage Insurance Co. and CUNA Mutual Insurance Society, and that "constrains the ability of CMG to write new, high quality business." Primary new insurance written in third quarter 2009 was $489 million, compared with more than $1 billion for second quarter and nearly $1.5 billion in third quarter 2008. The company's risk-to-capital ratio was 16.8:1 at the end of third quarter. CMG's ownership agreement provides for a capital call to the two parent companies should the ratio reach 19:1.


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