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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) October 21, 1998
THE PMI GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-13664 94-3199675
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
601 MONTGOMERY STREET, SAN FRANCISCO, CALIFORNIA 94111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (415) 788-7878
___________________________________________________________________
(Former name or former address, if changed since last report.)
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Item 5. Other Events
On October 21, 1998 The Omnibus Spending Bill of 1999 was adopted. This
legislation included a provision repealing section 202 of H.R. 4194, the
Departments of Veteran Affairs ("VA") and Housing and Urban Development ("HUD")
and Independent Agencies appropriations Act, 1999. The repealed section 202
would have amended the charter for the Federal Home Loan Mortgage Corporation
("Freddie Mac") to allow it to use any method of default loss protection that is
financially equal or superior, on an individual or pooled basis, to the
protection provided by private mortgage insurance companies.
During a presentation at the Mortgage Bankers Association of America annual
convention earlier this week, Freddie Mac's Chairman, Leland Brendsel, announced
that Freddie Mac would pursue a permanent charter amendment that would allow
Freddie Mac to utilize alternative forms of default loss protection, such as
spread accounts, or otherwise forego the use of private mortgage insurance on
higher loan-to-value mortgages. Currently, Freddie Mac can purchase loans with
down payments of less than 20%, only if the loans are insured or use other
limited methods to protect against default. At a press briefing during the same
Mortgage Bankers Association convention, the Chairman and Chief Executive
Officer of Federal Home Loan Mortgage Corporation ("Fannie Mae"), James Johnson,
announced that although Fannie Mae declined to join Freddie Mac in seeking a
charter amendment, Fannie Mae is interested in pursuing new risk management
options. Mr. Johnson also announced that Fannie Mae is working with mortgage
insurers and lenders on appropriate risk management and dispersion of risk.
The TPG Group, Inc. ("Company") conducts its residential mortgage insurance
business through its wholly-owned subsidiaries, including PMI Mortgage Insurance
Co. ("PMI"). Private mortgage insurers, including PMI, compete directly with
federal and state governmental and quasi-governmental agencies, principally the
FHA and, to a lesser degree, the VA. Although management believes that it is
too early to ascertain the impact of Freddie Mac's intent to seek a charter
amendment, any change in legislation which affects the ability of FHA, Freddie
Mac, Fannie Mae or the VA to offer a substitute for mortgage insurance, would
likely have an adverse affect on the competitive position of PMI and
consequently could materially and adversely affect the Company's financial
condition and results of operations.
Item 7. Financial statements, Pro Forma Financial Information and Exhibits
None
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
The PMI Group, Inc.
(Registrant)
October 23, 1998 By: /s/ Victor J. Bacigalupi
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Victor J. Bacigalupi
Senior Vice President,
General Counsel and Secretary
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Dwight D. Smith
Counsel
Writer's Direct Line: (415) 291-6197
Facsimile: (415) 291-6175
Internet Address: [email protected]
VIA EDGAR
October 23, 1998
Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549-1004
RE: The PMI Group, Inc. (Commission file number 1-13664) Form 8-K
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Ladies and Gentlemen:
We are transmitting for filing The PMI Group, Inc.'s Form 8-K pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934. The filing is being
made pursuant to Item 5, Other Events, adoption of The Omnibus Spending Bill of
1999 that included a provision repealing section 202 of appropriations bill
(H.R. 4194) for the Veteran Affairs and Department of Housing and Urban
Development.
Please direct any questions or comments to the undersigned at (800) 288-1970,
ext. 197.
Sincerely,
/s/ Dwight D. Smith
Dwight D. Smith
Counsel
Enclosures
cc: John Lorenzen, Jr.
Victor Bacigalupi
William Seymore
