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                                                                     Exhibit 4.2
                                                                     -----------

                                                                  Execution Copy

                     Resale Registration Rights Agreement


                                     among

                             The PMI Group, Inc.,

                      Banc of America Securities LLC, and

                             Lehman Brothers Inc.



                           Dated as of July 16, 2001
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          RESALE REGISTRATION RIGHTS AGREEMENT, dated as of July 16, 2001, among
The PMI Group, Inc., a Delaware corporation (together with any successor entity,
herein referred to as the "Company"), Banc of America Securities LLC and Lehman
Brothers Inc., as initial purchasers (the "Initial Purchasers") under the
Purchase Agreement (as defined below).

          Pursuant to the Purchase Agreement, dated as of July 10, 2001, between
the Company and the Initial Purchasers (the "Purchase Agreement"), the Initial
Purchasers have agreed to purchase from the Company $300,000,000 ($360,000,000
if the Initial Purchasers exercise their option in full)  in aggregate principal
amount of 2.50% Senior Convertible Debentures due 2021 (the "Securities").  The
Securities will be convertible into fully paid, nonassessable shares of common
stock, par value $0.01 per share, of the Company  (the "Common Stock") on the
terms, and subject to the conditions, set forth in the Indenture (as defined
herein).  To induce the Initial Purchasers to purchase the Securities, the
Company has agreed to provide the registration rights set forth in this
Agreement pursuant to Section 3(m) of the Purchase Agreement.

          The parties hereby agree as follows:

          1.   Definitions

          .  As used in this Agreement, the following capitalized terms shall
have the following meanings:

          "Additional Interest":  As defined in Section 3(a) hereof.

          "Additional Interest Payment Date":  Each January 15 and July 15.

          "Agreement":  This Resale Registration Rights Agreement.

          "Blue Sky Application":  As defined in Section 6(a) hereof.

          "Business Day":  The definition of "Business Day" in the Indenture.

          "Commission":  Securities and Exchange Commission.

          "Common Stock":  As defined in the preamble hereto.

          "Company":  As defined in the preamble hereto.

          "Effectiveness Period":  As defined in Section 2(a)(iii) hereof.

          "Effectiveness Target Date":  As defined in Section 2(a)(ii) hereof.

          "Exchange Act":  Securities Exchange Act of 1934, as amended.

          "Holder":  A Person who owns, beneficially or otherwise, Transfer
     Restricted Securities.
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          "Holder Questionnaire":  As defined in Section 2(b) hereof.

          "Indemnified Holder":  As defined in Section 6(a) hereof.

          "Indenture":  The Indenture, dated as of July 16, 2001 between the
     Company and The Bank of New York, as trustee (the "Trustee"), pursuant to
     which the Securities are to be issued, as such Indenture is amended,
     modified or supplemented from time to time in accordance with the terms
     thereof.

          "Initial Purchasers":  As defined in the preamble hereto.

          "Majority of Holders":  Holders holding over 50% of the aggregate
     principal amount of Securities outstanding; provided that, for purpose of
     this definition, a holder of shares of Common Stock which constitute
     Transfer Restricted Securities and issued upon conversion of the Securities
     shall be deemed to hold an aggregate principal amount of Securities (in
     addition to the principal amount of Securities held by such holder) equal
     to the quotient of (x) the number of such shares of Common Stock held by
     such holder and (y) the conversion rate in effect at the time of such
     conversion as determined in accordance with the Indenture.

          "NASD":  National Association of Securities Dealers, Inc.

          "Person":  An individual, partnership, corporation, company,
     unincorporated organization, trust, joint venture or a government or agency
     or political subdivision thereof.

          "Purchase Agreement":  As defined in the preamble hereto.

          "Prospectus":  The prospectus included in a Shelf Registration
     Statement, as amended or supplemented by any prospectus supplement and by
     all other amendments thereto, including post-effective amendments, and all
     material incorporated by reference into such Prospectus.

          "Questionnaire Deadline":  As defined in Section 2(b) hereof.

          "Record Holder":  With respect to any Additional Interest Payment
     Date, each Person who is a Holder on the January 1 or July 1 immediately
     preceding the relevant Additional Interest Payment Date.  In the case of a
     Holder of shares of Common Stock issued upon conversion of the Debentures,
     "Record Holder" shall mean each Person who is a Holder of shares of Common
     Stock which constitute Transfer Restricted Securities on the January 1 or
     July 1 immediately preceding the relevant Additional Interest Payment Date.

          "Registration Default":  As defined in Section 3(a) hereof.

          "Sale Notice":  As defined in Section 4(e) hereof.

          "Securities":  As defined in the preamble hereto.

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          "Securities Act":  Securities Act of 1933, as amended.

          "Shelf Filing Deadline": As defined in Section 2(a)(i) hereof.

          "Shelf Registration Statement":  As defined in Section 2(a)(i) hereof.

          "Suspension Notice".  As defined in Section 4(c) hereof.

          "Suspension Period".  As defined in Section 4(b)(i) hereof.

          "TIA":  Trust Indenture Act of 1939, as amended, and the rules and
     regulations of the Commission thereunder, in each case, as in effect on the
     date the Indenture is qualified under the TIA.

          "Transfer Restricted Securities":  Each Security and each share of
     Common Stock issued upon conversion of Securities until the earlier of:

               (i)    the date on which such Security or such share of Common
          Stock issued upon conversion has been effectively registered under the
          Securities Act and disposed of in accordance with the Shelf
          Registration Statement;

               (ii)   the date on which such Security or such share of Common
          Stock issued upon conversion is transferred in compliance with Rule
          144 under the Securities Act or may be sold or transferred by a person
          who is not an affiliate of the Company pursuant to Rule 144 under the
          Securities Act (or any other similar provision then in force) without
          any volume or manner of sale restrictions thereunder; or

               (iii)  the date on which such Security or such share of Common
          Stock issued upon conversion ceases to be outstanding (whether as a
          result of redemption, repurchase and cancellation, conversion or
          otherwise).

          "Underwritten Registration":  A registration in which securities of
     the Company are sold to an underwriter for reoffering to the public.

          Unless the context otherwise requires, the singular includes the
     plural, and words in the plural include the singular.

          2.   Shelf Registration


          (a)  The Company shall:

               (i) not later than 90 days after the date hereof (the "Shelf
          Filing Deadline"), cause to be filed a registration statement pursuant
          to Rule 415 under the Securities Act (the "Shelf Registration
          Statement"), which Shelf Registration Statement shall provide for
          resales of all Transfer Restricted Securities held by Holders that
          have provided the information required pursuant to the terms of
          Section 2(b) hereof;

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               (ii)   use its reasonable efforts to cause the Shelf Registration
          Statement to be declared effective by the Commission not later than
          180 days after the date hereof (the "Effectiveness Target Date"); and

               (iii)  use its reasonable efforts to keep the Shelf Registration
          Statement continuously effective, supplemented and amended as required
          by the provisions of Section 4(b) hereof to the extent necessary to
          ensure that (A) it is available for resales by the Holders of Transfer
          Restricted Securities entitled, subject to Section 2(b), to the
          benefit of this Agreement and (B) conforms with the requirements of
          this Agreement and the Securities Act and the rules and regulations of
          the Commission promulgated thereunder as announced from time to time,
          for a period (the "Effectiveness Period") until the earliest of:

                         (1) two years following the last date of original
                    issuance of any of the Securities; or

                         (2) the date when the Holders of Transfer Restricted
                    Securities are able to sell all such Transfer Restricted
                    Securities immediately without restriction pursuant to the
                    volume limitation provisions of Rule 144 under the
                    Securities Act; and

                         (3) the date when all of the Transfer Restricted
                    Securities of those Holders that complete and deliver in a
                    timely manner the Holder Questionnaire described below are
                    registered under the Shelf Registration Statement and
                    disposed of in accordance with the Shelf Registration
                    Statement.

          (b)  No Holder of Transfer Restricted Securities may include any of
its Transfer Restricted Securities in the Shelf Registration Statement pursuant
to this Agreement unless such Holder furnishes to the Company in writing, prior
to or on the 20th Business Day after a request therefor (or, in the case of a
Holder that is a transferee of Transfer Restricted Securities, prior to or on
the earlier of (i) the 20/th/ Business Day after the completion of such transfer
to the transferee and (ii) 9:00 a.m., San Francisco time, on the second Business
Day before the effectiveness of the Shelf Registration Statement) (the
"Questionnaire Deadline"), such information as the Company may reasonably
request for use in connection with the Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein and in any application to
be filed with or under state securities laws (the form of which request is
attached as Appendix A to the offering memorandum dated July 10, 2001 regarding
the sale of the Securities to the Initial Purchasers and is referred to herein
as the "Holder Questionnaire"). In connection with all such requests for
information from Holders of Transfer Restricted Securities, the Company shall
notify such Holders of the requirements set forth in the preceding sentence. The
Company agrees and undertakes that (i) it shall distribute a Holder
Questionnaire no later than 20 Business Days prior to the effectiveness of the
Shelf Registration Statement to each Holder at the address set forth on the
register of Securities maintained by the Registrar of the Securities or the
records of the transfer agent of the Common Stock at such time, and (ii) upon
the request of any Holder prior to 9:00 a.m., San Francisco time, on the second
Business Day before the effectiveness of the Shelf Registration Statement, the
Company shall distribute a

                                       4
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Holder Questionnaire to such Holder at the address set forth in such request.
Holders that do not complete the Holder Questionnaire and timely deliver it to
the Company shall not be named as selling securityholders in the Prospectus or
preliminary Prospectus included in the Shelf Registration Statement and
therefore shall not be permitted to sell any Transfer Restricted Securities
pursuant to the Shelf Registration Statement. No Holder of Transfer Restricted
Securities shall be entitled to Additional Interest pursuant to Section 3 hereof
unless such Holder shall have provided all such reasonably requested information
prior to or on the Questionnaire Deadline. Each Holder as to which the Shelf
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make information
previously furnished to the Company by such Holder not materially misleading.

          3.   Additional Interest.

          (a)  If:

               (i)    the Shelf Registration Statement is not filed with the
          Commission prior to or on the Shelf Filing Deadline;

               (ii)   the Shelf Registration Statement has not been declared
          effective by the Commission prior to or on the Effectiveness Target
          Date;

               (iii)  except as provided in Section 4(b)(i) hereof, the Shelf
          Registration Statement is filed and declared effective but, during the
          Effectiveness Period, shall thereafter cease to be effective or fail
          to be usable for its intended purpose without being succeeded within
          five Business Days by a post-effective amendment to the Shelf
          Registration Statement, a supplement to the Prospectus or a report
          filed with the Commission pursuant to Section 13(a), 13(c), 14 or
          15(d) of the Exchange Act that cures such failure and, in the case of
          a post-effective amendment, is itself immediately declared effective;
          or

               (iv)   (A)  prior to or on the 45/th/ or 60/th/ day, as the case
          may be, of any Suspension Period, such suspension has not been
          terminated or (B) Suspension Periods exceed an aggregate of 90 days in
          any 360 day period,

(each such event referred to in foregoing clauses (i) through (iv), a
"Registration Default"), the Company hereby agrees to pay additional interest
("Additional Interest") with respect to the Transfer Restricted Securities from
and including the day following the Registration Default to but excluding the
earlier of (1) the day on which the Registration Default has been cured and (2)
the date the Shelf Registration Statement is no longer required to be kept
effective, accruing at a rate:

               (A)    in respect of the Securities, to each holder of
          Securities, (x) with respect to the first 90-day period during which a
          Registration Default shall have occurred and be continuing, equal to
          0.25% per annum of the principal amount of the Securities, and (y)
          with respect to the period commencing on the 91/st/ day following the
          day the Registration Default shall have occurred and be continuing,
          equal to 0.50% per annum of the principal amount of the Securities;
          provided that

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<PAGE>

          in no event shall Additional Interest accrue at a rate per year
          exceeding 0.50% of the principal amount of the Securities; and

               (B)  in respect of any shares of Common Stock, to each holder of
          shares of Common Stock issued upon conversion of Securities, (x) with
          respect to the first 90-day period in which a Registration Default
          shall have occurred and be continuing, equal to 0.25% per annum of the
          principal amount of the converted Securities, and (y) with respect to
          the period commencing the 91/st/ day following the day the
          Registration Default shall have occurred and be continuing, equal to
          0.50% per annum of the principal amount of the converted Securities;
          provided that in no event shall Additional Interest accrue at a rate
          per year exceeding 0.50% of the principal amount of the converted
          Securities.

          (b)  All accrued Additional Interest shall be paid in arrears to
Record Holders by the Company on each Additional Interest Payment Date in the
same manner as the payment of interest on the Securities. Upon the cure of all
Registration Defaults relating to any particular Security or share of Common
Stock, the accrual of Additional Interest with respect to such Security or share
of Common Stock will cease.

          All obligations of the Company set forth in this Section 3 that are
outstanding with respect to any Transfer Restricted Security at the time such
security ceases to be a Transfer Restricted Security shall survive until such
time as all such obligations with respect to such Transfer Restricted Security
shall have been satisfied in full.

          The Additional Interest set forth above shall be the exclusive
monetary remedy available to the Holders of Transfer Restricted Securities for
such Registration Default.

          4.   Registration Procedures.

          (a)  In connection with the Shelf Registration Statement, the Company
shall comply with all the provisions of Section 4(b) hereof and shall use its
reasonable efforts to effect such registration to permit the sale of the
Transfer Restricted Securities, and pursuant thereto, shall as expeditiously as
possible prepare and file with the Commission a Shelf Registration Statement
relating to the registration on any appropriate form under the Securities Act.

          (b)  In connection with the Shelf Registration Statement and any
Prospectus required by this Agreement to permit the sale or resale of Transfer
Restricted Securities, the Company shall:

               (i)  Subject to any notice by the Company in accordance with this
          Section 4(b) of the existence of any fact or event of the kind
          described in Section 4(b)(iii)(D), use its reasonable efforts to keep
          the Shelf Registration Statement continuously effective during the
          Effectiveness Period; upon the occurrence of any event that would
          cause the Shelf Registration Statement or the Prospectus contained
          therein (A) to contain a material misstatement or omission or (B) not
          be effective and usable for resale of Transfer Restricted Securities
          during the Effectiveness Period, the Company shall file promptly an
          appropriate amendment to the Shelf Registration Statement, a
          supplement to the Prospectus or a report

                                       6
<PAGE>

          filed with the Commission pursuant to Section 13(a), 13(c), 14 or
          15(d) of the Exchange Act, in the case of clause (A), correcting any
          such misstatement or omission, and, in the case of either clause (A)
          or (B), use its reasonable efforts to cause such amendment to be
          declared effective and the Shelf Registration Statement and the
          related Prospectus to become usable for their intended purposes as
          soon as practicable thereafter. Notwithstanding the foregoing, the
          Company may suspend the effectiveness of the Shelf Registration
          Statement by written notice to the Holders for a period not to exceed
          an aggregate of 45 days in any 90-day period (each such period, a
          "Suspension Period") if:

                    (x)   an event occurs and is continuing as a result of which
               the Shelf Registration Statement, the Prospectus, any amendment
               or supplement thereto, or any document incorporated by reference
               therein would, in the Company's judgment, contain an untrue
               statement of a material fact or omit to state a material fact
               required to be stated therein or necessary to make the statements
               therein not misleading; and

                    (y)   the Company determines in good faith that the
               disclosure of such event at such time would be seriously
               detrimental to the Company and its subsidiaries;

          provided that, in the event the disclosure relates to a previously
          undisclosed proposed or pending material business transaction, the
          disclosure of which the Company determines in good faith would be
          reasonably likely to impede the Company's ability to consummate such
          transaction, the Company may extend a Suspension Period from 45 days
          to 60 days; provided, however, that Suspension Periods shall not
          exceed an aggregate of 90 days in any 360-day period. The Company
          shall not be required to specify in the written notice to the Holders
          the nature of the event giving rise to the Suspension Period.

               (ii)  Prepare and file with the Commission such amendments and
          post-effective amendments to the Shelf Registration Statement as may
          be necessary to keep the Shelf Registration Statement effective during
          the Effectiveness Period; cause the Prospectus to be supplemented by
          any required Prospectus supplement, and as so supplemented to be filed
          pursuant to Rule 424 under the Securities Act, and to comply fully
          with the applicable provisions of Rules 424 and 430A under the
          Securities Act in a timely manner; and comply with the provisions of
          the Securities Act with respect to the disposition of all securities
          covered by the Shelf Registration Statement during the applicable
          period in accordance with the intended method or methods of
          distribution by the sellers thereof set forth in the Shelf
          Registration Statement or supplement to the Prospectus.

               (iii) Advise the selling Holders promptly and, if requested by
          such selling Holders, to confirm such advice in writing, except as
          provided in clause (D) below:

                                       7
<PAGE>

                    (A) when the Prospectus or any Prospectus supplement or
               post-effective amendment has been filed, and, with respect to the
               Shelf Registration Statement or any post-effective amendment
               thereto, when the same has become effective,

                    (B) of any request by the Commission for amendments to the
               Shelf Registration Statement or amendments or supplements to the
               Prospectus or for additional information relating thereto,

                    (C) of the issuance by the Commission of any stop order
               suspending the effectiveness of the Shelf Registration Statement
               under the Securities Act or of the suspension by any state
               securities commission of the qualification of the Transfer
               Restricted Securities for offering or sale in any jurisdiction,
               or the initiation of any proceeding for any of the preceding
               purposes, or

                    (D) of the existence of any fact or the happening of any
               event, during the Effectiveness Period, that makes any statement
               of a material fact made in the Shelf Registration Statement, the
               Prospectus, any amendment or supplement thereto, or any document
               incorporated by reference therein untrue, or that requires the
               making of any additions to or changes in the Shelf Registration
               Statement or the Prospectus in order to make the statements
               therein not misleading.

          If at any time the Commission shall issue any stop order suspending
          the effectiveness of the Shelf Registration Statement, or any state
          securities commission or other regulatory authority shall issue an
          order suspending the qualification or exemption from qualification of
          the Transfer Restricted Securities under state securities or Blue Sky
          laws, the Company shall use its reasonable efforts to obtain the
          withdrawal or lifting of such order at the earliest possible time and
          will provide to each Holder who is named in the Shelf Registration
          Statement prompt notice of the withdrawal of any such order.

               (iv)  Make available at reasonable times for inspection by one or
          more representatives of the selling Holders, designated in writing by
          a Majority of Holders whose Transfer Restricted Securities are
          included in the Shelf Registration Statement, and any attorney or
          accountant retained by such selling Holders, all financial and other
          records, pertinent corporate documents and properties of the Company
          as shall be reasonably necessary to enable them to conduct a
          reasonable investigation within the meaning of Section 11 of the
          Securities Act, and cause the Company's officers, directors, managers
          and employees to supply all information reasonably requested by any
          such representative or representatives of the selling Holders,
          attorney or accountant in connection therewith; provided, however,
          that the Company shall have no obligation to deliver information to
          any selling Holder or representative pursuant to this Section 4(b)(iv)
          unless such selling Holder or representative shall have

                                       8
<PAGE>

          executed and delivered a confidentiality agreement in a form
          acceptable to the Company relating to such information.

               (v)     If requested by any selling Holders, promptly incorporate
          in the Shelf Registration Statement or Prospectus, pursuant to a
          supplement or post-effective amendment if necessary, such information
          as such selling Holders may reasonably request to have included
          therein, including, without limitation information relating to the
          "Plan of Distribution" of the Transfer Restricted Securities.

               (vi)    Furnish to each selling Holder upon their request,
          without charge, at least one copy of the Shelf Registration Statement,
          as first filed with the Commission, and of each amendment thereto (and
          any documents incorporated by reference therein or exhibits thereto
          (or exhibits incorporated in such exhibits by reference) as such
          Person may request).

               (vii)   Deliver to each selling Holder, without charge, as many
          copies of the Prospectus (including each preliminary prospectus) and
          any amendment or supplement thereto as such Persons reasonably may
          request; subject to any notice by the Company in accordance with this
          Section 4(b) of the existence of any fact or event of the kind
          described in Section 4(b)(iii) (D), the Company hereby consents to the
          use of the Prospectus and any amendment or supplement thereto by each
          of the selling Holders in connection with the offering and the sale of
          the Transfer Restricted Securities covered by the Prospectus or any
          amendment or supplement thereto.

               (viii)  Before any public offering of Transfer Restricted
          Securities, cooperate with the selling Holders and their counsel in
          connection with the registration and qualification of the Transfer
          Restricted Securities under the securities or Blue Sky laws of such
          jurisdictions in the United States as the selling Holders may
          reasonably request and do any and all other acts or things necessary
          or advisable to enable the disposition in such jurisdictions of the
          Transfer Restricted Securities covered by the Shelf Registration
          Statement; provided, however, that the Company shall not be required
          (A) to register or qualify as a foreign corporation or a dealer of
          securities where it is not now so qualified or to take any action that
          would subject it to the service of process in any jurisdiction where
          it is not now so subject or (B) to subject themselves to taxation in
          any such jurisdiction if they are not now so subject.

               (ix)    Cooperate with the selling Holders to facilitate the
          timely preparation and delivery of certificates representing Transfer
          Restricted Securities to be sold and not bearing any restrictive
          legends (unless required by applicable securities laws); and enable
          such Transfer Restricted Securities to be in such denominations and
          registered in such names as the Holders may request at least two
          Business Days before any sale of Transfer Restricted Securities.

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                                                                              11

               (xii)   Use its reasonable efforts to cause the Transfer
          Restricted Securities covered by the Shelf Registration Statement to
          be registered with or approved by such other U.S. governmental
          agencies or authorities as may be necessary to enable the seller or
          sellers thereof to consummate the disposition of such Transfer
          Restricted Securities.

               (xiii)  Subject to Section 4(b)(i) hereof, if any fact or event
          contemplated by Section 4(b)(iii)(D) hereof shall exist or have
          occurred, use its reasonable efforts to prepare a supplement or post-
          effective amendment to the Shelf Registration Statement or related
          Prospectus or any document incorporated therein by reference or file
          any other required document so that, as thereafter delivered to the
          purchasers of Transfer Restricted Securities, the Prospectus will not
          contain an untrue statement of a material fact or omit to state any
          material fact required to be stated therein or necessary to make the
          statements therein, in light of the circumstances in which they are
          made, not misleading.

               (xiv)   Provide CUSIP numbers for all Transfer Restricted
          Securities not later than the effective date of the Shelf Registration
          Statement and provide the Trustee under the Indenture with
          certificates for the Securities that are in a form eligible for
          deposit with The Depository Trust Company.

               (xv)    Cooperate and assist in any filings required to be made
          with the NASD and in the performance of any due diligence
          investigation by any underwriter that is required to be retained in
          accordance with the rules and regulations of the NASD.

               (xvi)   Otherwise use its reasonable efforts to comply with all
          applicable rules and regulations of the Commission and all reporting
          requirements under the rules and regulations of the Exchange Act.

               (xvii)  Cause the Indenture to be qualified under the TIA not
          later than the effective date of the Shelf Registration Statement
          required by this Agreement, and, in connection therewith, cooperate
          with the Trustee and the holders of Securities to effect such changes
          to the Indenture as may be required for such Indenture to be so
          qualified in accordance with the terms of the TIA; and execute and use
          its reasonable efforts to cause the Trustee thereunder to execute all
          documents that may be required to effect such changes and all other
          forms and documents required to be filed with the Commission to enable
          such Indenture to be so qualified in a timely manner.

               (xviii) Cause all Common Stock covered by the Shelf Registration
          Statement to be listed or quoted, as the case may be, on each
          securities exchange or automated quotation system on which Common
          Stock is then listed or quoted.

               (xix)   Provide to each Holder upon written request each document
          filed with the Commission pursuant to the requirements of Section 13
          and Section 15
<PAGE>

                                                                              12

          of the Exchange Act after the effective date of the Shelf Registration
          Statement, unless such document is available through the Commission's
          EDGAR system.

          (c)  Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice (a "Suspension Notice") from the
Company of the existence of any fact of the kind described in Section
4(b)(iii)(D) hereof, such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the Shelf Registration Statement
until:

               (i)  such Holder has received copies of the supplemented or
          amended Prospectus contemplated by Section 4(b)(xiii) hereof; or

               (ii) such Holder is advised in writing by the Company that the
          use of the Prospectus may be resumed, and has received copies of any
          additional or supplemental filings that are incorporated by reference
          in the Prospectus.

If so directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice of suspension.

          (d)  Each Holder who intends to be named as a selling Holder in the
Shelf Registration Statement shall furnish to the Company in writing, within 20
Business Days after a request therefor as set forth in the Holder Questionnaire,
such information regarding such Holder and the proposed distribution by such
Holder of its Transfer Restricted Securities as the Company may reasonably
request for use in connection with the Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein.  Holders that do not
complete the Holder Questionnaire and deliver it to the Company shall not be
named as selling securityholders in the Prospectus or preliminary Prospectus
included in the Shelf Registration Statement and therefore shall not be
permitted to sell any Transfer Restricted Securities pursuant to the Shelf
Registration Statement; provided, however, that notwithstanding the foregoing,
transferees of all or a portion of a Holder's Transfer Restricted Securities who
furnish the Company a completed Holder Questionnaire on or prior to the earlier
of (i) the 20/th/ business day after the completion of such transfer to the
transferee and (ii) 9:00 a.m., San Francisco time, on the second Business Day
before the effectiveness of the Shelf Registration Statement shall be named as
selling securityholders in the Prospectus or preliminary Prospectus included in
the Shelf Registration Statement.  Each Holder who intends to be named as a
selling Holder in the Shelf Registration Statement shall promptly furnish to the
Company in writing such other information as the Company may from time to time
reasonably request in writing.

          (e)  Upon the effectiveness of the Shelf Registration Statement, each
Holder shall notify the Company at least three Business Days prior to any
intended distribution of Transfer Restricted Securities pursuant to the Shelf
Registration Statement (a "Sale Notice"), which notice shall be effective for
five Business Days.  Each Holder of Transfer Restricted Securities, by accepting
the same, agrees to hold any communication by the Company in response to a Sale
Notice in confidence.  Upon receipt of a Sale Notice, the Company shall inform
each Holder in writing of the existence of a Suspension Period or otherwise, of
the kind of event described in Section 4(b)(iii)(D).
<PAGE>

                                                                              13

          5.   Registration Expenses.

               All expenses incident to the Company's performance of or
compliance with this Agreement shall be borne by the Company regardless of
whether a Shelf Registration Statement becomes effective, including, without
limitation:

               (i)    all registration and filing fees and expenses (including
          filings made with the NASD);

               (ii)   all fees and expenses of compliance with federal
          securities and state Blue Sky or securities laws;

               (iii)  all expenses of printing (including printing of
          Prospectuses and certificates for the Common Stock to be issued upon
          conversion of the Securities) and the Company's expenses for messenger
          and delivery services and telephone;

               (iv)   all fees and disbursements of counsel to the Company;

               (v)    all application and filing fees in connection with listing
          (or authorizing for quotation) the Common Stock on a national
          securities exchange or automated quotation system pursuant to the
          requirements hereof; and

               (vi)   all fees and disbursements of independent certified public
          accountants of the Company.

          The Company shall bear its internal expenses (including, without
limitation, all salaries and expenses of their officers and employees performing
legal, accounting or other duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.

          6.   Indemnification and Contribution.

          (a)  The Company shall indemnify and hold harmless each Holder, such
Holder's officers and employees and each person, if any, who controls such
Holder within the meaning of the Securities Act (each, an "Indemnified Holder"),
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to resales of the Transfer Restricted
Securities), to which such Indemnified Holder may become subject, insofar as any
such loss, claim, damage, liability or action arises out of, or is based upon:

               (i)    any untrue statement or alleged untrue statement of a
          material fact contained in (A) the Shelf Registration Statement or
          Prospectus or any amendment or supplement thereto or (B) any blue sky
          application or other document or any amendment or supplement thereto
          prepared or executed by the Company (or based upon written information
          furnished by or on behalf of the Company expressly for use in such
          blue sky application or other document or amendment on supplement)
          filed in any jurisdiction specifically for the purpose of qualifying
          any or all of the Transfer Restricted Securities under the securities
          law
<PAGE>

                                                                              14

          of any state or other jurisdiction (such application or document being
          hereinafter called a "Blue Sky Application"); or

               (ii) the omission or alleged omission to state therein any
          material fact required to be stated therein or necessary to make the
          statements therein, in the light of the circumstances under which they
          were made, not misleading,

and shall reimburse each Indemnified Holder promptly upon demand for any legal
or other expenses reasonably incurred by such Indemnified Holder in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Shelf Registration Statement or Prospectus or
amendment or supplement thereto or Blue Sky Application in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Holder (or its related Indemnified Holder) specifically for use therein;
provided, further, that the Company shall not be liable to any Indemnified
Holder under the indemnity agreement in this subsection (a) with respect to any
preliminary Prospectus to the extent that any such loss, claim, damage or
liability of such Indemnified Holder results from the fact that such Indemnified
Holder sold Transfer Restricted Securities to a Person as to whom it shall be
established that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the final Prospectus in any case where such
delivery is required by the Securities Act if the Company had previously
furnished copies thereof in sufficient quantities to such Indemnified Holder and
the loss, claim, damage or liability of such Indemnified Holder results from an
untrue statement or omission of a material fact contained in the preliminary
Prospectus which was (i) identified to such Identified Holder at or prior to the
earlier of the filing with the Commission or the furnishing to such Indemnified
Holder of the corrected Prospectus and (ii) corrected in the final Prospectus.
The foregoing indemnity agreement is in addition to any liability which the
Company may otherwise have to any Indemnified Holder.

          (b)  Each Holder, severally and not jointly, shall indemnify and hold
harmless the Company, its officers and employees and each person, if any, who
controls the Company within the meaning of the Securities Act, from and against
any loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Company or any such officer, employee or controlling
person may become subject, insofar as any such loss, claim, damage or liability
or action arises out of, or is based upon:

               (i)  any untrue statement or alleged untrue statement of any
          material fact contained in the Shelf Registration Statement or
          Prospectus or any amendment or supplement thereto or any Blue Sky
          Application; or

               (ii) the omission or the alleged omission to state therein any
          material fact required to be stated therein or necessary to make the
          statements therein, in light of the circumstances under which they
          were made, not misleading,

but in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written
<PAGE>

                                                                              15

information furnished to the Company by or on behalf of such Holder (or its
related Indemnified Holder) specifically for use therein, and shall reimburse
the Company and any such officer, employee or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by the Company or any
such officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Holder may otherwise have to the Company and
any such officer, employee or controlling person.

          (c)  Promptly after receipt by an indemnified party under this Section
6 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 6 except to the extent it has
been materially prejudiced by such failure and, provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 6.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel satisfactory to the indemnified party.  After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Holders shall have the right to employ a single counsel to represent jointly
a the Holders and their officers, employees and controlling persons who may be
subject to liability arising out of any claim in respect of which indemnity may
be sought by the Holders against the Company under this Section 6 if the Holders
seeking indemnification shall have been advised by legal counsel that there may
be one or more legal defenses available to such Holders and their respective
officers, employees and controlling persons that are different from or
additional to those available to the Company, and in that event the fees and
expenses of such separate counsel shall be paid by the Company.  No indemnifying
party shall:

               (i)  without the prior written consent of the indemnified parties
          (which consent shall not be unreasonably withheld) settle or
          compromise or consent to the entry of any judgment with respect to any
          pending or threatened claim, action, suit or proceeding in respect of
          which indemnification or contribution may be sought hereunder (whether
          or not the indemnified parties are actual or potential parties to such
          claim or action) unless such settlement, compromise or consent
          includes an unconditional release of each indemnified party from all
          liability arising out of such claim, action, suit or proceeding, or

               (ii) be liable for any settlement of any such action effected
          without its written consent (which consent shall not be unreasonably
          withheld), but if settled with its written consent or if there be a
          final judgment for the plaintiff in any such action, the indemnifying
          party agrees to indemnify and hold harmless any
<PAGE>

                                                                              16

          indemnified party from and against any loss of liability by reason of
          such settlement or judgment.

          (d)  If the indemnification provided for in this Section 6 shall for
any reason be unavailable or insufficient to hold harmless an indemnified party
under Section 6(a) or 6(b) in respect of any loss, claim, damage or liability
(or action in respect thereof) referred to therein, each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability (or action in respect thereof):

               (i)  in such proportion as is appropriate to reflect the relative
          benefits received by the Company from the offering and sale of the
          Transfer Restricted Securities on the one hand and a Holder with
          respect to the sale by such Holder of the Transfer Restricted
          Securities on the other, or

               (ii) if the allocation provided by clause (6)(d)(i) is not
          permitted by applicable law, in such proportion as is appropriate to
          reflect not only the relative benefits referred to in clause 6(d)(i)
          but also the relative fault of the Company on the one hand and the
          Holders on the other in connection with the statements or omissions or
          alleged statements or alleged omissions that resulted in such loss,
          claim, damage or liability (or action in respect thereof), as well as
          any other relevant equitable considerations.

The relative benefits received by the Company on the one hand and a Holder on
the other with respect to such offering and such sale shall be deemed to be in
the same proportion as the total net proceeds from the offering of the
Securities purchased under the Purchase Agreement (before deducting expenses)
received by the Company, on the one hand, bear to the total proceeds received by
such Holder with respect to its sale of Transfer Restricted Securities on the
other.  The relative fault of the parties shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Holders on the other, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission.  The Company and
each Holder agree that it would not be just and equitable if the amount of
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(d).  The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section 6 shall be deemed to include, for purposes of this Section
6, any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim.  Notwithstanding the provisions of this Section 6, no Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Transfer Restricted Securities purchased by it were
resold exceeds the amount of any damages which such Holder has otherwise been
required to pay by reason of any untrue or alleged untrue statement or omission
or alleged omission.  No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person
<PAGE>

                                                                              17

who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute as provided in this Section 6(d) are several and not
joint.

          7.   Rule 144A.  In the event the Company is not subject to Section 13
or 15(d) of the Exchange Act, the Company hereby agrees with each Holder, for so
long as any Transfer Restricted Securities remain outstanding, to make available
to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act in order to permit resales
of such Transfer Restricted Securities pursuant to Rule 144A.

          8.   No Participation in Underwritten Registrations.  No Holder may
participate in any Underwritten Registration hereunder.

          9.   Miscellaneous.

          (a)  Remedies.  The Company acknowledges and agrees that any failure
by the Company to comply with its obligations under Section 2 hereof may result
in material irreparable injury to the Initial Purchasers or the Holders for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Initial Purchasers or any Holder may obtain such relief as may be
required to specifically enforce the Company's obligations under Section 2
hereof. The Company further agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.

          (b)  Actions Affecting Transfer Restricted Securities.  The Company
shall not, directly or indirectly, take any action with respect to the Transfer
Restricted Securities as a class that would adversely affect the ability of the
Holders of Transfer Restricted Securities to include such Transfer Restricted
Securities in a registration undertaken pursuant to this Agreement.

          (c)  No Inconsistent Agreements.  The Company will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. In addition, the
Company shall not grant to any of its security holders (other than the Holders
of Transfer Restricted Securities in such capacity) the right to include any of
its securities in the Shelf Registration Statement provided for in this
Agreement other than the Transfer Restricted Securities. The Company has not
previously entered into any agreement (which has not expired or been terminated)
granting any registration rights with respect to its securities to any Person
which rights conflict with the provisions hereof.

          (d)  Amendments and Waivers.  This Agreement may not be amended,
modified or supplemented, and waivers or consents to or departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of a Majority of Holders.

          (e)  Notices.  All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, facsimile
transmission, or air courier guaranteeing overnight delivery:
<PAGE>

                                                                              18

               (i)  if to a Holder, at the address set forth on the records of
          the registrar under the Indenture or the transfer agent of the Common
          Stock, as the case may be; and

               (ii) if to the Company:

                    The PMI Group, Inc.
                    601 Montgomery Street
                    San Francisco, California 94111
                    Attention:  Victor J. Bacigalupi, Esq.
                    Executive Vice President, General Counsel and Secretary
                    Tel:  (415) 788-7878
                    Fax:  (415) 291-6175

                    With a copy to:

                    Sullivan & Cromwell
                    1870 Embarcadero Road
                    Palo Alto, California 94303
                    Attention:  John Savva, Esq.
                    Tel:  (650) 461-5600
                    Fax:  (650) 461-5700

          All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if transmitted by
facsimile; and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.

          (f)  Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
(i) this Agreement shall not inure to the benefit of or be binding upon a
successor or assign of a Holder unless and to the extent such successor or
assign acquired Transfer Restricted Securities from such Holder and (ii) nothing
contained herein shall be deemed to permit any assignment, transfer or other
disposition of Transfer Restricted Securities in violation of the terms of the
Purchase Agreement or the Indenture. If any transferee of any Holder shall
acquire Transfer Restricted Securities, in any manner, whether by operation of
law or otherwise, such Transfer Restricted Securities shall be held subject to
all of the terms of this Agreement, and by taking and holding such Transfer
Restricted Securities such person shall be conclusively deemed to have agreed to
be bound by and to perform all of the terms and provisions of this Agreement.

          (g)  Counterparts.  This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed
<PAGE>

                                                                              19

shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

          (h)  Securities Held by the Company or Their Affiliates.  Whenever the
consent or approval of Holders of a specified percentage of Transfer Restricted
Securities is required hereunder, Transfer Restricted Securities held by the
Company or its "affiliates" (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.

          (i)  Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

          (j)  Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.

          (k)  Severability.  If  any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.

          (l)  Entire Agreement.  This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Transfer Restricted Securities.  This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
<PAGE>

          In Witness Whereof, the parties have executed this Agreement as of the
date first written above.

                              The PMI Group, Inc.



                              By________________________________________________
                                   Name:
                                   Title:

                              Banc of America Securities LLC



                              By________________________________________________
                                   Authorized Representative

                              Lehman Brothers Inc.



                              By________________________________________________
                              Authorized Representative

                                      A-1