The company also warned it faces hundreds of millions of dollars in debts it can't repay.
"Time is up for PMI," said Matthew Howlett, an analyst with Macquarie Group, an investment firm. "This may be the end of an era for PMI as a leading mortgage insurance company."
The moribund housing market has savaged PMI, which is one of the nation's largest providers of mortgage insurance to cover lenders should borrowers default on their home loans.
PMI Group said it has retained Evercore Partners, which advised General Motors on its restructuring, according to a PMI regulatory filing on Monday.
PMI also has retained law firms Sullivan & Cromwell and Young Conaway Stargatt & Taylor.
PMI also said the seizure by Arizona state regulators of the mortgage insurance unit is an event that could trigger a default on three of the company's loans.
The loan agreements enable the lenders to demand payment within two months. The principal amounts of the three loans are $250 million, $150 million and $285 million, PMI said.
"PMI Group does not have the financial resources to pay the outstanding principal amount," PMI stated in the filing.
The company did not disclose the amount of the loans that could be called.
The major challenge that confronts PMI is its needs to raise capital to meet the requirements of regulators. The mortgage unit was seized by the Arizona Insurance Department due to that lack of capital.
"It's possible that some investors could buy PMI and attempt to bring them back," said Jim Ryan, a senior analyst with Morningstar. "But there is not a whole lot of opportunity for that."
Regulators in August barred PMI Group's insurance unit from writing new policies.
That erased a huge chunk of ongoing revenue for the company.
But it also left PMI vulnerable to its foes such as Assured Guaranty, MGIC Investment, Radian Group and Ambac Financial.
"PMI's market share is being eaten up," Ryan said. "MGIC said in a recent report that they are picking up some of PMI's market share."
PMI has lost money for 16 straight quarters. During the 12 months that ended in June, the company lost $727 million.
The last time PMI turned a profit was in the April-June quarter of 2007.
Trading in PMI was halted after state regulators seized the PMI unit on Friday. Arizona has been designated as the primary regulator of the mortgage insurance unit.
PMI also said regulators have decided to limit payouts of insurance claims to 50 percent of the amount of the claim, effective Monday. Payment of the remaining half of any claim would be deferred.
"The Arizona Department of Insurance now has full possession, management and control of PMI Mortgage Insurance," PMI Group said in a prepared release.
Rivals of PMI, although struggling, appear to be in better shape. Analysts said the big problem for PMI simply may have come down to its focus on mortgages in California and Florida. Both states suffer from brutal housing sectors.
"PMI is a reminder the housing problem is going to be with us for years to come," said Michael Yoshikami, chief investment strategist with Walnut Creek-based investment firm YCMNet.