Letter: Comment to FHFA on the Notice of Proposed Rulemaking (NPR) on “Quality Control Standards for Automated Valuation Models (AVMs)”

USMI submitted a letter to Federal Housing Finance Agency (FHFA) Director Sandra Thompson to provide feedback on the Notice of Proposed Rulemaking (NPR) on “Quality Control Standards for Automated Valuation Models (AVMs).” As sophisticated long-term managers of single family mortgage credit risk, private MIs support a workable regulatory framework for mortgage market participants’ use of AVMs and policies that appropriately balance improvements and efficiencies in the collateral valuation process with the accurate assessment and pricing of risk. In the letter, USMI highlights the following factors to be considered: (1) principles-based approach to quality control frameworks; (2) application to the GSEs; (3) transparency in AVM data; and (4) nondiscrimination and fair lending. Click here to read the letter.

Letter: Joint Letter to the FHFA on Credit Score Implementation

USMI joined a coalition of industry trade associations and consumer advocate groups in sending a joint trade letter to the Federal Housing Finance Agency (FHFA) in response to the agency’s March 23 announcement regarding the implementation plan for the adoption of the FICO 10T and VantageScore 4.0 credit score models, as well as the bi-merge credit reporting policy, by Fannie Mae and Freddie Mac. The coalition recommends that the credit score policy implementation plan should be adjusted to include a comprehensive, transparent, and iterative stakeholder engagement process, as well as robust data transparency, specifically including the release of long-term historical datasets for Classic FICO, FICO 10T, and VantageScore 4.0. The organizations also call for the FHFA to provide a recalibrated timeline that accommodates data analysis and modeling, as well as stakeholder feedback on the costs, complexity, consumer impact, and policy implications of the transition. Click here to read the letter.

The letter’s signatories include:
American Bankers Association, Center for Responsible Lending, Community Home Lenders of America, Consumer Bankers Association, Credit Union National Association, Housing Policy Council, Independent Community Bankers of America, Leading Builders of America, Mortgage Bankers Association, National Association of Federally-Insured Credit Unions, National Association of Home Builders of the United States, National Association of REALTORS®, National Housing Conference, Reinsurance Association of America, Securities Industry and Financial Markets Association, and Structured Finance Association.

Letter: Joint Trade Letter to FHFA on Proposed Enterprise Regulatory Capital Framework (ERCF)

USMI joined a coalition of housing finance organizations including the American Bankers Association (ABA), Housing Policy Council (HPC), and the Independent Community Bankers of America (ICBA) in responding to one element of the Federal Housing Finance Agency’s (FHFA) Notice of Proposed Rulemaking (NPR) on enhancements to the Enterprise Regulatory Capital Framework (ERCF). The organizations raised concerns regarding the method of calculating a borrower’s representative credit score once the government-sponsored enterprises (GSEs) migrate to the bi-merge credit report requirements. The coalition recommends that loan-level GSE data from 1999 forward should be published sooner than 4Q 2023 to allow for the necessary analysis and impact assessment ahead of the proposed implementation in 1Q 2024. In addition, the organizations call for FHFA to work more closely with the industry to fully assess operational and regulatory compliance considerations for mortgage market participants, including for the notices and disclosures required under the Fair Credit Reporting Act (FCRA). Click here to read the letter.