News Filter: Press Releases & Statements

Press Release: USMI Submits Comments to CFPB’s Advance Notice of Proposed Rulemaking on the Qualified Mortgage Definition

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WASHINGTON — Lindsey Johnson, President of U.S. Mortgage Insurers (USMI), today released the following statement on the organization’s comment letter submitted in response to the Consumer Financial Protection Bureau’s (“the Bureau”) Advance Notice of Proposed Rulemaking on the “Qualified Mortgage (QM) Definition under the Truth in Lending Act (Regulation Z).”

“As takers of first-loss mortgage credit risk with more than six decades of expertise and experience underwriting and actively managing that risk, USMI members understand the need to balance prudent underwriting with a clear and transparent standard that maintains access to affordable and sustainable mortgage finance credit for home-ready borrowers. The upcoming expiration of the temporary QM category, often referred to as the ‘GSE Patch,’ provides an important opportunity for the Bureau to assess what has developed within the marketplace since the enactment of the QM Rule. Notably, mortgage lending has been done with far greater diligence by market participants to ensure consumers have a reasonable ability-to-repay (ATR) and has resulted in a much stronger housing finance system. Further, the GSE Patch has played a critical role in maintaining credit availability. In our comments to the Bureau, we offer specific recommendations for replacing the current GSE Patch to establish a single transparent and consistent QM definition in a way to balance access to mortgage finance credit and proper underwriting guardrails to ensure consumers’ ATR. USMI’s recommendations include:

  • Maintaining the ATR and product restrictions as part of any updates to the QM definition to ensure discipline in the lending community and to protect consumers;
  • Retaining specific underwriting guardrails such as the current debt-to-income (DTI) component of the QM definition, but modifying the specific threshold to better serve consumers; and
  • Developing a single set of transparent compensating factors for loans with DTIs above 45 and up to 50 percent for defining QM across all markets, similar to how the GSEs, FHA, and VA use compensating factors in their respective markets today.

“Retaining specific thresholds in measuring a consumer’s income, assets, and financial obligations better serves consumers and ensures that the statutory and regulatory intent of measuring a consumer’s ATR is met. Further, adjusting the current DTI limit from 43 percent to 45 percent for all loans, and up to 50 percent for loans with accompanying compensating factors creates a more transparent and level playing field that provides greater certainty for borrowers and lenders and reduces the impact of the expiration of the GSE Patch. USMI believes that the development of a single transparent industry standard will facilitate greater consistency across all lending channels and ensure there is not market arbitrage to achieve QM status.

“USMI applauds the Bureau for undertaking the necessary process for updating this critical rule that is aimed at enhancing lending standards and consumer protection. We look forward to working with the Bureau as it seeks to implement any changes to this important rule.”

Following the release of the Bureau’s ANPR in July, USMI published a blog with observations and recommendations for replacing the GSE Patch.

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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 www.usmi.org.

Statement: The Administration’s Housing Finance Reform Reports

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WASHINGTON — Lindsey Johnson, President of U.S. Mortgage Insurers (USMI), today issued the following statement on the Administration’s Housing Finance Reform reports to address the nation’s housing finance system, including the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac.
 
“USMI applauds the U.S. Treasury Department (Treasury) and the Department of Housing and Urban Development (HUD) for releasing their comprehensive Housing Reform Plan and Housing Finance Reform Plan (“Plans”) that together outline needed reforms to the housing finance system.  While USMI looks forward to reviewing the Plans in greater detail, we particularly appreciate Treasury and HUD identifying specific areas where the Administration can focus its efforts to put the housing finance system on a more sustainable path ahead of comprehensive legislative reform.
 
“While Congress ultimately needs to address the underlying structural challenges of the GSEs, the Administration’s proposal to reduce taxpayer risk exposure and address the areas of misaligned incentives of the GSEs while increasing transparency and market discipline could be the catalyst to break the legislative logjam and enable policymakers to enact comprehensive reforms.  Many of the actions proposed by the Administration’s Plans align with USMI’s principles for Administrative Reform, including our position that these actions could further reduce taxpayer risk by increasing private capital within the financial system, level the playing field between the GSEs and private market participants, provide greater transparency regarding GSE pricing and practices, and ensure that consumers have access to affordable and sustainable mortgage finance credit.
 
“Further, the Plans call for the Federal Housing Finance Agency (FHFA) and HUD to develop and implement a specific understanding as to the appropriate roles and overlap between the GSEs and the Federal Housing Administration (FHA).  USMI has long called for a consistent housing policy across different agencies and for greater coordination between the government-backed FHA market and the conventional market, and we look forward to working with the Administration as it seeks to define these important roles. 
 
“USMI is encouraged by the thoughtful and comprehensive Plans released today by the Administration and looks forward to working with the Administration to promote private capital ahead of taxpayer risk, instill greater transparency and market discipline within the housing finance system, and ensure Americans continue to have access to safe and affordable mortgage finance options.”
 
Last fall, USMI released a white paper on administrative reform (available for download here) that outlined 11 key recommendations for policymakers to consider when contemplating the future of housing finance. A PDF of these recommendations can be downloaded here.

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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 www.usmi.org.

Statement: President Trump’s Executive Order on Housing Affordability

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WASHINGTON — Lindsey Johnson, President of U.S. Mortgage Insurers (USMI), today issued the following statement on President Trump’s Executive Order on Establishing a White House Council on Eliminating Regulatory Barriers to Affordable Housing:

“We welcome the Trump Administration’s executive order on housing affordability because it recognizes the significant challenges that exist for many first time and repeat borrowers with finding affordable homes and seeks tangible steps to address the underlying issues. To support sustainable homeownership growth, home-ready borrowers need access to prudent, affordable mortgage credit while also ensuring the private sector, and not taxpayers, are on the hook for mortgage credit risk. The private mortgage insurance industry’s business is focused on facilitating sustainable mortgage finance credit to home-ready borrowers who do not have large down payments—helping more than one million individuals in 2018 attain homeownership sooner than they otherwise could—all the while shielding taxpayers from mortgage credit risk. USMI looks forward to continuing to work with the Administration and other stakeholders to find effective ways for homebuyers to gain access to prudent and affordable mortgages.”

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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 www.usmi.org.

Blog: New Report Shows Saving 20 Percent to Buy a Home Takes 20 Years on Average; Over 1 Million Avoided the Wait in 2018 by Using Private Mortgage Insurance

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Texas, Florida, California, Illinois, and Ohio Round Out the Top Five States for Low Down Payment Mortgage Lending

WASHINGTON, June 5, 2019 — U.S. Mortgage Insurers (USMI), the association representing the nation’s leading private mortgage insurance (MI) companies, today released its annual report detailing low down payment insured mortgage lending in all 50 states and the District of Columbia. The report breaks down on a state-by-state basis low down payment mortgage lending with private MI, including the number of borrowers helped, the percentage of borrowers who were first-time homebuyers, average loan amounts, average FICO credit scores, and provides an analysis of how long it would take those borrowers to save for a 20 percent versus a five percent down payment.

“No, you do not need a 20 percent down payment to gain mortgage approval,” said Lindsey Johnson, President of USMI. “Our report underscores the critical role private MI plays in helping millions of first-time and middle-income homebuyers bridge the down payment gap across the United States. For over 60 years, private MI has helped provide Americans with affordable access to mortgage credit while also protecting taxpayers and the federal government from undue mortgage credit risk. Millions of borrowers have relied on private MI to responsibly purchase homes and MI will continue to facilitate the dream of homeownership going forward,” continued Johnson.

USMI finds that it could take 20 years for a household earning the national median income of $61,372 to save 20 percent (plus closing costs) for a $262,250 single-family home, the national median sales price. However, that wait time drops to seven years if the household purchases a home with a 5 percent down, where the loan is sustainably backed by private MI. This represents a 65 percent decrease in wait time at the national level, and USMI found the same percentage decrease at the state level.  

Since 1957, MI has helped more than 30 million families qualify for a mortgage. In 2018 alone, MI helped more than one million borrowers purchase or refinance a mortgage, nearly 60 percent of which were first-time homebuyers, and more than 40 percent had annual incomes below $75,000. The average loan amount purchased or refinanced with MI was $244,715 and the average FICO score for these borrowers was 741, compared to a 733 score for all home loan borrowers. The below table shows the top five states in which MI was used by borrowers to purchase or refinance homes in 2018.

 

State Number of Borrowers 
Helped with Private MI		 First-Time 
Homebuyers
Texas 89,738 57 percent
Florida 77,565 56 percent
California 71,996 69 percent
Illinois 48,200 65 percent
Ohio 43,761 59 percent

 

In addition to the findings on how MI helps borrowers qualify for low down payment mortgages, the report also highlights the role MI plays in reducing the federal government’s, and therefore U.S. taxpayers’, exposure to mortgage credit risk. Private MI serves as credit protection against mortgage credit risk in the event a borrower defaults on his or her mortgage, meaning every dollar that an MI company covers when a borrower defaults on his or her mortgage is a dollar that the GSEs and taxpayers do not have to pay. In fact, since the 2008 financial crisis the MI industry has paid over $50 billion in claims – losses the government and taxpayers did not have to bear.

“The fact that private mortgage insurance has been helping Americans qualify for low down payment mortgages for more than six decades is a testament to the important access, stability, and credit protection the MI industry brings to the housing finance system,” added Johnson. “In recent years, the private MI industry has become even stronger with more robust underwriting standards, stronger capital requirements, and improved risk management. The industry is well-positioned to continue its important work, and we look forward to further helping grow American homeownership.”

The complete report on MI in the U.S. is available here, along with all 50 state fact sheets and data for the District of Columbia.

Statement: U.S. Senate’s Confirmation of Mark Calabria as New Director of Federal Housing Finance Agency

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WASHINGTON — Lindsey Johnson, President of U.S. Mortgage Insurers (USMI), today issued the following statement on the U.S. Senate’s confirmation of Dr. Mark Calabria as the Federal Housing Finance Agency (FHFA) Director:

“USMI applauds the Senate’s confirmation of Director Mark Calabria to serve as the next FHFA Director. Fannie Mae and Freddie Mac (the ‘GSEs’), the 11 Federal Home Loan Banks, market participants, and American homebuyers will be well-served under Director Calabria’s leadership at this critical time in the housing finance system.

“Director Calabria’s deep understanding of the mortgage finance system will be invaluable in promoting a more robust housing market that provides borrowers with access to affordable low down payment mortgage credit while simultaneously protecting taxpayers from undue mortgage credit risk. Director Calabria has long been an advocate for greater taxpayer protection against mortgage credit risk, including the use of private mortgage insurance (MI) to shield taxpayers and the federal government from financial risk on low down payment lending. We are confident that Director Calabria will continue to recognize the importance of private MI in the housing finance system.

“We look forward to working closely with Director Calabria to ensure that homebuyers continue to have affordable and prudent options for low down payment mortgage finance credit while also protecting taxpayers. For more than 60 years, private mortgage insurers have played a leading role in promoting affordable and sustainable homeownership and we look forward to building upon this important mission in the future.”

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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 www.usmi.org.

Statement: USMI Applauds the U.S. Senate Banking Committee’s Approval of Mark Calabria as the New Director of Federal Housing Finance Agency—Urges Quick Senate Floor Consideration

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WASHINGTON — Lindsey Johnson, President of U.S. Mortgage Insurers (USMI), today issued the following statement on the U.S. Senate Banking Committee’s confirmation of Dr. Mark Calabria as the Federal Housing Finance Agency (FHFA) Director: 

“USMI applauds the Senate Banking Committee’s approval of Dr. Mark Calabria to serve as the next FHFA Director. Dr. Calabria’s extensive public service and deep understanding of the mortgage finance system will serve the Agency, Fannie Mae and Freddie Mac (the “GSEs”), market participants, and homebuyers well.

“Dr. Calabria has long been an advocate for greater taxpayer protection against mortgage credit risk, including the use of private mortgage insurance to guard taxpayers and the federal government from financial risk on low down payment lending. We are confident that Dr. Calabria will continue to recognize the importance of private mortgage insurance in the conventional mortgage market both in helping creditworthy low down payment borrowers qualify for home financing, while also protecting American taxpayers from undue mortgage credit risk. Over the last 60 years, private MI has helped more than 30 million individuals become homeowners. Right now, private mortgage insurance protection is the only source of private capital that is permanently dedicated to standing in a first-loss position in front of the GSEs and taxpayers on GSE-backed mortgages, through various credit cycles.

“USMI looks forward to working closely with Dr. Calabria to ensure that borrowers continue to have competitive options for low down payment mortgage finance credit in the conventional market and to protect taxpayers even further. USMI urges a quick Senate Floor vote and support for Dr. Calabria. For more than 60 years, private mortgage insurers have played a leading role in promoting affordable and sustainable homeownership and we look forward to building upon this important mission in the future.”

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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 www.usmi.org.

Op-Ed: Private insurance plays a critical part in home mortgage ecosystem

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By Lindsey Johnson

2/17/19

Housing finance reform remains a priority in Washington. Earlier this month, Senate Banking Committee Chairman Mike Crapo (R-Idaho) released a proposal to reform the government-sponsored enterprises, Fannie Mae and Freddie Mac.

Like many other proposals, including House Financial Services Committee Chairwoman Maxine Waters’ (D-Calif.) HOME Forward draft legislation, Chairman Crapo’s proposal recognizes the important role that private capital — and specifically private mortgage insurance — serves to facilitate homeownership for low down-payment borrowers and protect taxpayers from mortgage credit risk.

The nominee for director of the Federal Housing Finance Agency (FHFA), Mark Calabria, recently appeared before the Senate Banking Committee as part of his confirmation process. He’s an individual who appreciates the benefits that private mortgage insurance extends beyond protecting the government and taxpayers.

Private mortgage insurance remains the longest serving, time-tested way to help low down-payment borrowers qualify for home financing in the conventional market.

Our nation’s mortgage finance system is one that must balance access to credit for consumers while also shielding taxpayers. Fortunately, private mortgage insurance is uniquely and permanently dedicated to serving both objectives through all economic cycles. As such, it should remain a critical piece of any future, reformed system.

Access to affordable, low down-payment mortgages is understandably top-of-mind for many policymakers. While there is an important role for government and taxpayer-backed programs to play in the broader system, any comprehensive reform should first encourage the greater use of private capital that ensures access to affordable low down-payment mortgages in the conventional market.

Fortunately, there is generally bipartisan agreement around this principle. Facilitating this kind of mortgage lending is precisely the purpose of private mortgage insurance, which has helped more than 30 million families secure home loans over the last six decades — many of whom were first-time or middle-income homebuyers.

Last year, more than 1 million homeowners qualified to purchase or refinance their home thanks to private mortgage insurance. Of these homeowners, nearly 60 percent were first-time homebuyers and more than 40 percent had incomes below $75,000.

Congressional leaders and the Trump administration must reform the housing finance system into one that works for all Americans by protecting taxpayers while also ensuring access to affordable mortgage financing.

The Harvard Joint Center for Housing Studies projected that the U.S. would add 13.6 million households between 2015 and 2025, which means affordable low down-payment options must be part of the equation.

Mortgage insurance companies support the government-sponsored enterprises and mortgage lenders in the origination of low- to moderate- income mortgage programs that address affordable housing needs of local communities.

The private mortgage insurance industry stands ready to continue its role as the solution to enable millions of families to achieve homeownership.

A version of this op-ed originally appeared in The Hill on February 17, 2019.

Statement: Senate Banking Committee Chairman’s Outline for Reform of Fannie Mae and Freddie Mac

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WASHINGTON — Lindsey Johnson, President of U.S. Mortgage Insurers (USMI), today issued the following statement on the outline released today by Senate Banking Committee Chairman Mike Crapo (R-ID) on proposed reforms to Fannie Mae and Freddie Mac (the GSEs) and the housing finance system:

“Today Chairman Crapo released a thoughtful outline to reform the GSEs in order to put the housing finance system on more stable footing. The reform plan covers many areas and USMI is particularly pleased that Chairman Crapo recognizes the importance and value of private mortgage insurance in enabling access to low down payment conventional mortgages while protecting taxpayers at least to the levels that they are protected today.  Ten years after conservatorship of the GSEs, it is essential that meaningful reforms be done to better protect taxpayers and to ensure consumers will have access to mortgage finance credit through all market cycles.

“USMI is pleased to see Chairman Crapo provide these ideas for reform and we look forward to working with his office and the Committee on the details of these concepts.  We are committed to working with the Senate, House, and the Administration to promote reforms that put more private capital in front of taxpayer risk and to create a more sustainable housing finance system that works for consumers, market participants, and taxpayers.

“For more than 60 years, MI has provided effective credit risk protection for our nation’s mortgage finance system and helped 30 million families become homeowners.  This time-tested form of private capital stands ready to continue minimizing taxpayer risk while ensuring that mortgage credit remains accessible and affordable.”

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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 www.usmi.org.

Statement: On the Intent to Nominate Mark Calabria as FHFA Director

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WASHINGTON — Lindsey Johnson, President of the U.S. Mortgage Insurers (USMI), today issued the following statement on President Trump’s intent to nominate Dr. Mark Calabria for Federal Housing Finance Agency (FHFA) Director: 

“USMI applauds the nomination of Mark Calabria to serve as the next FHFA Director. Dr. Calabria is a respected housing finance expert and longtime public servant who understands the intricacies of the housing and mortgage finance markets. His extensive housing experience in both the public and private sectors, including his role in crafting the Housing and Economic Recovery Act of 2008, will allow him to immediately tackle the important issues facing our housing finance system. Dr. Calabria has been a long-time advocate for greater taxpayer protection against mortgage credit risk, including promoting the greater use of private mortgage insurance to further insulate the federal government and taxpayers from mortgage related risks. We are confident that as FHFA Director, Calabria will continue to recognize the importance of private mortgage insurance in the conventional mortgage market and work to ensure that private capital plays its appropriate role in enabling access to homeownership for low-down payment borrowers while also protecting the federal government and American taxpayers against mortgage credit risk.

“We look forward to working closely with Dr. Calabria to grow the role of permanent sources of private capital in shouldering more risk in front of taxpayers in the housing market. For more than 60 years, private mortgage insurance has played a leading role in promoting affordable and sustainable homeownership and we look forward to building upon our success in the future.”

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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 www.usmi.org.

Statement: FHA’s Annual Report to Congress

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Report Underscores the Importance of Private Mortgage Insurance for Low Down Payment Lending While Government-Backed FHA Financial Health Not Yet Out of the Woods

 

WASHINGTON— Lindsey Johnson, President of USMI, released the following statement on the Federal Housing Administration’s (FHA) “Annual Report to Congress Regarding the Financial Status of the Mutual Mortgage Insurance Fund (MMIF) Fiscal Year 2018”:

“Today, the FHA released its 2018 Annual Report to Congress on the financial status of its Mutual Mortgage Insurance Fund (MMIF). According to the report, the MMIF’s capital ratio stands at 2.76 percent, up from 2.18 percent last year and slightly above the statutory requirement of 2 percent. The FHA, which insures roughly $1.3 trillion in mortgage credit risk, is an integral piece of the housing finance system. In addition to risks in the reverse program that still exist, the report also highlights that cash-out refinances continue to grow exponentially at FHA, comprising 63 percent of all FHA refinance transactions—as well as an increase in the number of mortgages with very high debt-to-income ratios. This year’s report underscores the need to further put FHA on more stable financial footing, so it can continue to serve low- and moderate-income borrowers who need it most.

“This report is the first under the leadership of FHA Commissioner Brian Montgomery, a seasoned mortgage finance expert who previously served as FHA Commissioner under President George W. Bush during the last housing crisis – a time of unprecedented market stress. Commissioner Montgomery appreciates the importance of properly managing the FHA and returning it to its core mission and intended role in the housing market, which is to focus on borrowers who truly need its 100 percent taxpayer-backed home loans. We agree with Commissioner Montgomery’s statement in the Actuarial Report that one of FHA’s guiding principles should be appropriately managing risks on behalf of borrowers, lender participants, and the U.S. taxpayer. As of September 30, 2018, the MMIF Capital Ratio was 2.76 percent, slightly above the 2.00 percent required by Congress. While an increase from Fiscal Year 2017, this is a thin margin, and taxpayers should never be put at risk again.”

“The FHA has been and will continue to be a critical participant in the housing finance system, but its current oversized role and weak financial health remain a cause for concern. The FHA must continue to refocus on its core mission and scale back its expanded footprint that grew significantly during the great recession.

USMI also agrees with Commissioner Montgomery’s previously expressed views that private capital should play a leading role in guaranteeing low down payment mortgage credit risk to protect U.S. taxpayers and the federal government. Fortunately, there is a robust and available private market today through private mortgage insurance (MI) that is ready to help low-down payment borrowers become homeowners. Private MI  has successfully worked to ensure that creditworthy borrowers have access to safe, sustainable and affordable mortgage options for more than 60 years, and USMI will continue to work with FHA, Congress and the Administration to foster a more robust housing finance system that relies on a coordinated and consistent housing policy so private capital takes more of the credit risk in the housing markets.”

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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 www.usmi.org.

Statement: FHFA’s Updates to Private Mortgage Insurers’ Eligibility Requirements (PMIERs)

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WASHINGTON — U.S. Mortgage Insurers (USMI) President Lindsey Johnson issued the following statement on the Federal Housing Finance Agency’s (FHFA) newly released changes to its Private Mortgage Insurer Eligibility Requirements (PMIERS). PMIERS are a set of requirements implemented in 2015 for private mortgage insurance companies to be approved to insure loans acquired by Fannie Mae and Freddie Mac:

“The existing robust capital and operational standards brought by PMIERS have provided exactly what Fannie Mae and Freddie Mac (the GSEs) and other market participants sought in the role of private mortgage insurers (MI)—greater confidence as permanent, dedicated sources of first loss credit risk protection and as trusted ‘second sets of eyes’ to protect long-term value in the housing finance system. PMIERs, which are the set of requirements for mortgage insurers to be approved to insure loans acquired by the GSEs, were developed after a public notice and comment period that the FHFA initiated in 2014. Since being implemented in 2015, PMIERs nearly doubled the amount of capital each mortgage insurer is required to hold, resulting in a minimum MI level of capital assets over 7 percent of risk insured. USMI member companies have maintained levels significantly over the PMIERs requirements, with each company holding millions in excess—and USMI members collectively holding nearly $2.6 billion in excess of these requirements.

“USMI members appreciate the opportunity to provide feedback to the GSEs and FHFA on proposed changes and the incremental improvements made in PMIERs 2.0. We look forward to continuing to work with the GSEs and FHFA in the future to build upon the strong credit enhancement that the mortgage insurance industry provides to protect lenders, the GSEs, and taxpayers. As publicly traded companies, private MIs have a keen interest in ensuring that the process for the development of any changes to PMIERs is transparent and that proposed changes are based on an econometric rationale that can be modeled and explained to investors, industry stakeholders and, importantly, to borrowers. Further, as the only GSE counterparties that have gone through a public notice and comment period for capital and operational requirements when PMIERs were initially developed and implemented, and that are currently transparent to all market participants and stakeholders, there should be greater consistency in the development and application of these same or equivalent capital standards for all sources of credit enhancement who take the same credit risk. This consistency will better ensure GSE counterparties are well capitalized, highly-regulated, are able to protect taxpayers through different market cycles, and will promote a more level playing field.

“PMIERs reflect that today’s MIs are highly capitalized, reliable counterparties. The MI industry provided significant protection against mortgage-related credit risk through the last financial crisis—paying more than $50 billion in claims through the downturn—before PMIERs were implemented. Today, the industry is on much better footing to further protect taxpayers during the next downturn.

“For more than 60 years, private MI has helped more than 30 million families qualify for a mortgage by bridging the gap between the down payment and home financing. In 2017 alone, MI helped more than one million borrowers safely purchase or refinance a mortgage. Today, the MI industry is stronger than it has ever been, and the requirements under PMIERs makes the industry even better poised to protect the GSEs and American taxpayers from mortgage credit risk in the future.”

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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 www.usmi.org.

Statement: Fannie Mae’s New Enterprise-Paid Mortgage Insurance Product

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WASHINGTON — Lindsey Johnson, President of U.S. Mortgage Insurers (USMI), today issued the following statement on the Fannie Mae’s new Enterprise-Paid Mortgage Insurance (EPMI) product:

“USMI appreciates the level of detail provided to the marketplace thus far and the additional details promised in the near future about Fannie Mae’s new Enterprise-Paid Mortgage Insurance (EPMI) product. However, Fannie Mae’s new EPMI pilot program is a troubling development and heightens concerns about the GSEs’ expanding roles in the housing finance system. Even after Congress raised questions about the Federal Housing Finance Agency (FHFA) and GSEs’ lack of transparency in developing, approving, and rolling out new products and activities—and their expanding operations in the mortgage market—Fannie Mae has moved ahead with a new program that bypasses the high capital and operational standards developed and enforced by the GSEs for private mortgage insurers, despite the fact that these entities are taking the exact same risk. Like Freddie Mac’s Integrated Mortgage Insurance (IMAGIN) program, this new Fannie Mae program represents a significant blurring of the bright line separation between primary market and secondary market activities and greater vertical integration of private sector activities into the GSEs.  Further, this promotes an unlevel playing field in the private market by allowing for different terms and standards for EPMI versus other sources of private capital. From a taxpayer perspective, we believe it is much more appropriate and prudent for dedicated forms of private capital that are available through economic cycles, such as private mortgage insurance, to continue to perform the critical functions of underwriting and assuming first loss credit risk at the loan level. This form of credit risk protection can and should be done even as the GSEs continue to disburse and diversify credit risk through channels such as reinsurance and the capital markets, just as private mortgage insurers do today. The MI industry continues to be a strong counterparty to the GSEs and our focus continues to be on the value MI brings to our customers, consumers, and to the federal government and American taxpayers.”

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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 www.usmi.org.