Bermuda re/insurer Arch Capital Group is buying bankrupt insurer PMI’s assets in $300 million deal to enter the US mortgage guaranty business as the housing market rebounds.Arch said in a statement Friday it was acquiring CMG Mortgage Insurance from its current owners, PMI Mortgage Insurance, and will hire staff from PMI.Arch will reinsure some coverage written by PMI, avoiding the books that drove the Walnut Creek, California-based firm to failure.An improving US housing market has attracted fresh investors to mortgage insurance, after the worst housing slump since the Great Depression hurt the industry.Essent Guaranty, whose backers included Goldman Sachs Group Inc and PartnerRe, began writing some policies in 2011 after buying assets from Triad Guaranty Inc, another hobbled mortgage insurer.“We are extremely pleased to be able to provide a strong source of private capital to a US mortgage insurance market in great need of capacity,” Constantine Iordanou, chief executive officer of Arch, said.He continued: “We believe that this transaction, which is consistent with our strategy of moving into new specialty lines of business where we can hire experienced teams that fit our corporate culture, will allow us to capitalise on significant opportunities in the US mortgage insurance marketplace. The new operation will complement our existing European Union-based mortgage insurance and global reinsurance operations, providing us with a platform to participate in mortgage insurance and reinsurance business on a worldwide basis.”US home prices rose 8.3 percent in December from a year earlier, the biggest jump since May 2006, according to data from CoreLogic Inc. Higher housing values benefit mortgage insurers, which pay lenders when homeowners default and foreclosures fail to recoup costs.Arch provides insurance for construction, healthcare and environmental risks, and sells workers’ compensation and medical-liability coverage.The company has about $5.75 billion in capital and operates in the US and Europe. The insurer has gained at least 18 percent each of the past three years in New York trading, and has climbed 7.9 percent since December 31.PMI filed for bankruptcy protection in November 2011 after the Arizona Department of Insurance took over the main unit as claims on sourced mortgages drained capital.Arch said it expects the deal to be completed within 12 months. The transaction needs approvals from an Arizona court, insurance regulators, and government mortgage-finance firms Fannie Mae and Freddie Mac, Arch said in the statement.