News & Resources

On September 26, USMI President Seth Appleton will participate in Housing Finance Strategies’ #HousingDC23 event, which will deliver expert insights into the intersection of housing policy, regulation, and technology. Appleton will speak on a panel titled, “Heard Around Town: Key Housing Policy Issues,” that will address emerging regulatory, policy, and housing market issues on the horizon in Washington, DC. Other panel participants include:

• Bob Broeksmit, President and CEO, Mortgage Bankers Association
• Ed DeMarco, President, Housing Policy Council
• Sarah Rosen Wartell, President, Urban Institute
• Faith Schwartz, Founder & CEO, Housing Finance Strategies (Moderator)

On August 21, the Urban Institute released a report titled, “Mortgage Insurance Data At A Glance – 2023.” The report showed that GSE mortgages with private MI have been the most common execution for low down payment borrowers since 2018. Additionally, it found that private MI is highly effective in reducing losses to the GSEs, with total loss severity for GSE loans without private MI being 11.2% higher than the loss severity for loans with private MI for the 1994-2022 origination period. The report also notes that since expanding its credit risk transfer (CRT) capabilities in 2015, the private MI industry has become even more proactive in managing and distributing credit risk. According to data from the private MI companies, the industry has executed 52 mortgage insurance-linked note (ILN) transactions and 52 reinsurance (quota share and excess of loss) deals to transfer more than $72 billion in risk.

On September 18, Appleton participated in the MISMO Fall Summit event, which covered topics such as IT modernization, credit score changes, appraisal, housing counseling, and more. Appleton was part of the panel titled, “Charting Your Path to Success with Upcoming Credit Score Changes,” where industry experts explored the paths credit scores take traversing industry, partner and internal systems and processes. Appleton discussed how private MIs, as long-term managers of mortgage credit risk, utilize credit scores for capital planning, and stressed the importance of stakeholder access to historical data and sufficient time to back test it as part of the transition process. Panel participants also included:

• Dan Fichtler, Senior Advisor, FHFA
• Shawn Jobe, Vice President, Head of Business Development, Informative Research
• Piper Beveridge, Vice President, Strategic Relations, ICE Mortgage Technology
• Cory Bland, Manager, Pricing Desk and GSE Reform, Navy Federal Credit Union
• Rick Hill, Vice President, Industry Technology, Mortgage Bankers Association (Moderator)

On September 11, USMI released a statement on FHFA’s announcement regarding the next phase of the public engagement process for updated credit score requirements for loans acquired by the GSEs. In the statement, USMI’s President noted that the association “looks forward to participating in the forthcoming forums and listening sessions to collaborate with policymakers and stakeholders to address issues, challenges, and opportunities associated with the implementation of new credit score requirements.” He continued, “[a]s part of the expanded public engagement process, USMI encourages FHFA to direct the GSEs to release loan-level data for Classic FICO, FICO 10T, and VantageScore 4.0 to allow for comprehensive analysis and work toward a smooth transition and achievable timeline that minimizes costs and complexity.” Read more on DS News’ coverage of the announcement here.

On August 14, USMI submitted a comment letter in response to FHFA’s Request for Input (RFI) on “Fannie Mae and Freddie Mac Single-Family Mortgage Pricing Framework,” which recommended principles for oversight of the pricing framework to ensure the GSEs and taxpayers are adequately protected against potential losses while supporting affordable and sustainable homeownership. “USMI welcomes the RFI as an opportunity to provide data, observations, and recommendations to inform FHFA’s work on policies and processes for the GSE Pricing Framework,” said Appleton, adding that “[a]s an association representing an industry that serves homebuyers with limited access to funds for large down payments, USMI fully supports Director Thompson’s consistent message that affordability and sustainability for borrowers and safety and soundness for the GSEs are not mutually exclusive. It is paramount that the GSE Pricing Framework be calibrated to best further the GSEs’ statutory mandates.” Read more on DS News’ coverage of related comment letters to FHFA here.

USMI recently submitted a letter to FHFA Director Sandra Thompson to provide feedback on the interagency Notice of Proposed Rulemaking on “Quality Control Standards for Automated Valuation Models (AVMs).” The private MI industry recognizes that there are opportunities to modernize residential property valuation with the use of AVMs, but it is critical that appropriate transparency, monitoring, and governance are in place. In the letter, USMI highlighted 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.

On September 14, the House Financial Services Committee’s Subcommittee on Financial Institutions and Monetary Policy held a hearing titled, “Implementing Basel III: What’s the Fed’s Endgame?” During the hearing, Representative Brad Sherman (D-CA) asked Mortgage Bankers Association (MBA) President and CEO Robert Broeksmit about the lack of credit for MI under Basel Endgame III. In his response, Broeksmit registered his opposition to the proposal’s failure to recognize MI and emphasized that bankers should be encouraged “to use other sources of loss absorbing capital in our marketplace.” Other subcommittee members from both sides of the aisle raised concerns about the proposal’s impact on access to homeownership for low- to moderate-income, first-time, and minority borrowers who lack large down payments.