Enable access to affordable mortgage credit & shield taxpayers from risk
The U.S. housing finance system needs to be put on a more sustainable path so that first-time, minority, and low- and moderate-income homebuyers have access to affordable mortgage credit while taxpayers are shielded from housing related credit risks. Private MI plays a critical role in providing access to mortgage credit and protecting taxpayers. It is an essential part of a smooth transition and any future housing finance system.
Private MI: An essential part of the housing finance system
USMI is dedicated to a housing finance system backed by private capital that enables access to affordable mortgage credit for borrowers while protecting taxpayers from risk. USMI and its members are ready to help build the future of homeownership and supports the following principles for any comprehensive housing finance reform.
Remove arbitrary and unnecessary costs
Certain fees and charges imposed by the GSEs, Fannie Mae and Freddie Mac, such as loan-level price adjustments (LLPAs), arbitrarily increase costs to home-ready borrowers. GSE fees should be based on transparent actuarial analysis of the mortgage credit risks being incurred and should fully reflect the risk-reducing benefits of private MI.
LLPAs should be reexamined and reformed to reflect the credit risk that is covered by MI on low down payment loans and the numerous improvements throughout the housing finance system. When the risk-reducing benefits of MI are not factored into GSE fees, consumers are charged twice for the same risk protection. This double charging is particularly burdensome for low- and moderate-income borrowers, many of whom are first-time, younger, and minority homebuyers.
USMI opposes the use of GSE fees to finance unrelated expenses, which imposes undue and unnecessary costs on future homeowners. There is broad consensus among industry and consumer groups that LLPAs should be reformed and they have sent a letter to FHFA on the matter.