One of the largest mortgage insurance companies in the US, the PMI Group, has established its pan-European operation in Dublin in a $75 million (€82.5 million) investment.
PMI Group chairman, Mr Roger Haughton, said the company hoped to have an influence on the mortgage market here by broadening housing affordability.
The new European arm of the group is a wholly owned indirect subsidiary, PMI Mortgage Insurance Company. It will offer a variety of mortgage credit enhancement products to lenders, including traditional primary insurance, structured portfolio products and reinsurance products.
PMI Mortgage Insurance is the first company of its kind to be domiciled in the Republic. All of the underwriting for the EU will pass through the Dublin office.
PMI aims to bring additional capacity to the Irish and European markets. A company spokesman said PMI was different because it specialised in the residential mortgage market.
He said the company's competitive advantages in Europe would include a core business focus with strong execution ability, strong financial strength rating and experience in developing new markets.
Mr Haughton said PMI wanted to help mortgage payers with more affordable products. He said this was done in the US through the provision of higher loan to value ratios, up to 100 per cent in some cases. This means a smaller downpayment for the house buyer and possibly longer repayment terms.
PMI has been engaged in advanced marketing and research in the Irish market through a London office. Its first priority here is to establish strategic partnerships with Irish mortgage lenders.
Mortgage insurance protects mortgage lenders against potential losses in the event of borrower default. By covering default risk on residential first mortgage loans, mortgage insurance facilitates the sale of low-down-payment mortgages.
PMI's decision to expand into Europe is based on a strategy of growth and diversity, enabling the group to spread its risks globally. It also has operations in Australia, New Zealand and Hong Kong.
