Given today's approval by Freddie to allow PMI to capitalize a sub and continue writing new business, TGIC should sure Freddie over their decision to yank TGIC's approved insurer status.
Based on the modeling I have done, TGIC will not be able to pay all their claims. But neither will PMI. The difference in the paid claims dollar recovery between the two is very small - TGIC claimholders will probably recover 80 cents on the dollar, while PMI claimholders might get up to 85 cents. But the difference is within modeling error.
Also, PMI has had the benefit of more than a year of writing new business which should be mildly profitable.
By yanking TGIC's approval, Freddie has treated them inequitably as compared to PMI. What standards is Freddie using for PMI compared to TGIC? How did they model each MIs books? Did they use consistent modeling?
Or was the decision based more on relationships?
Whatever the answers, it is pretty clear to me there was disparate treatment.