Article: USMI Seeks Improved Treatment for Private MI

May 16, 2024

An Inside Mortgage Finance article from May 16 titled, “USMI Seeks Improved Treatment for Private MI,” highlighted USMI’s recent supplemental comment letter on the Basel III Endgame proposed rule. The article covers USMI’s recommendations for the Proposed Rule along with quotes from USMI President Seth Appleton’s discussion with the article’s author, Monica Hogan.

The article quoted USMI’s supplemental comment letter, noting that the “agencies intended any new regulation would require private MI as a relevant credit factor in the definition of a ‘regulatory residential real estate exposure,’ and thus a factor in determining a loan’s loan-to-value ratio-based risk weight.” The article continues, “[h]owever, the proposed Basel III endgame, which will revise the capital requirements for mortgages held on bank balance sheets based on LTV ratio, didn’t provide much credit to loans with private MI.”

The article also highlights the impact the Proposed Rule could have on borrowers mentioning, “Appleton said private MI is key for homebuyers who don’t have the resources for large downpayments. Industry participants have been frustrated that the Biden administration has set a goal to help such borrowers while the capital requirement proposal would place additional burdens on lending to those borrowers.”

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