Statement: New GSE Credit Insurance Pilot Program


For Immediate Release

September 27, 2016

Media Contact: Dan Knight

(202) 777-3547


USMI Statement on New GSE Credit Insurance Pilot Program

WASHINGTON Lindsey Johnson, President and Executive Director of U.S. Mortgage Insurers (USMI), said the following today upon the announcement from Freddie Mac about a new pilot program involving mortgage insurers:

“For the past four years, Freddie Mac and Fannie Mae have been experimenting with a number of structures to shift risk away from the GSEs to the private markets. The program announced yesterday for an offering with affiliates of private mortgage insurers is the latest addition to this effort. While it is good to see the GSEs continue to explore ways to reduce the government’s mortgage credit risk exposure, this new offering is effectively a form of credit insurance that Freddie Mac stated builds on its Agency Credit Insurance Structure (ACIS), which is a back-end credit insurance program. While some mortgage insurers are exploring and may ultimately participate in this new credit insurance program, we believe it is important to note that this new structure should not be confused with the deep cover, true mortgage insurance front-end credit risk transfer proposal that we and others have been advocating for.

As the FHFA seeks comment through the RFI process on additional ways to do greater front-end risk sharing, USMI continues to believe that MI is one of the best, time-tested forms of credit risk protection for our nation’s mortgage finance system. We also believe that using more traditional deep cover MI would be a key component to a sound housing policy in the future. Specifically, our industry proposes expanding the current risk protection provided by MI, which today guards up to 35 percent of a loan’s value, as a means of front-end credit risk transfer. This will significantly protect taxpayers while also ensuring borrower access to low down payment mortgages. Having the GSEs increase that protection coverage would put more private capital at risk—precisely what taxpayers and the economy need. Such an entity-based program would make greater use of private capital, put the GSEs and taxpayers in a more remote loss position, allow lenders of all sizes and types to participate, and, importantly, help ensure access to affordable homeownership. As it has been for the past sixty years, private MI can be provided consistently through all economic cycles. We look forward to continuing that dialogue with FHFA, Fannie Mae and Freddie Mac, policymakers, and other stakeholders.”


U.S. Mortgage Insurers (USMI) is dedicated to a housing finance system backed by private capital that enables access to housing finance for borrowers while protecting taxpayers. Mortgage insurance offers an effective way to make mortgage credit available to more people. USMI is ready to help build the future of homeownership. Learn more at

Letter: USMI Welcomes Effort to Increase Reliance on Private Capital In Housing Finance

USMI delivered the following letter to members of the Senate Banking Committee last night:

USMI Header 750
May 20, 2015


The Honorable Richard Shelby

U.S. Senate Committee on Banking, Housing, and Urban Affairs
534 Dirksen Senate Office Building
Washington, DC 20510

Dear Chairman Shelby:

U.S. Mortgage Insurers (“USMI”) welcomes the effort to make progress on increasing the reliance on private capital in housing finance as part of consideration by the Senate Banking Committee of the Financial Regulatory Improvement Act of 2015.

Specifically, USMI supports Section 706, which calls on the Government Sponsored Enterprises (“GSEs”) to engage in front-end risk sharing transactions. This directive would make greater use of private capital to “de-risk” the GSEs, lower the exposure and costs for the enterprises and taxpayers and should lower costs to borrowers. USMI supports this effort, and will continue to work with the Committee during the legislative process on clarifications to ensure the legislation has the intended effect of being “transaction neutral” to permit a variety of methods of up front risk sharing, with all risk sharing counterparties held to equivalent standards.

Promotion of greater up front risk sharing will help build a strong, stable housing finance system that provides access to sustainable and affordable mortgage credit while protecting taxpayers. We look forward to favorable action on this important effort.



U.S. Mortgage Insurers

cc: The Honorable Sherrod Brown, Ranking Member

All members of the Senate Banking Committee

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