USMI Statement on Mortgage Bankers Association Report on Reform Recommendations for the GSEs and the Housing Finance System
WASHINGTON — Lindsey Johnson, President and Executive Director of the U.S. Mortgage Insurers (USMI), today issued the following statement on the Mortgage Bankers Association report on reform recommendations for Fannie Mae and Freddie Mac (the GSEs) and the housing finance system:
“Today the Mortgage Bankers Association (MBA) released a thoughtful report that outlines its recommendations to reform Fannie Mae and Freddie Mac (the GSEs) and the housing finance system. The report covers many areas and USMI is particularly pleased that MBA recognizes the value of loan-level credit enhancement and the benefit of private mortgage insurance (MI). Importantly the report promotes greater use of front-end credit risk sharing, including through private mortgage insurance. The report also recognizes the important functions of private market participants such as lenders, private mortgage insurers and others, and reinforces that there should be a bright line between the functions of these private market participants in the primary market, and those of secondary market participants. Housing finance is the last, and possibly the greatest, unfinished reform needed from the financial crisis. USMI is pleased to see MBA and other industry, trade and consumer groups provide ideas and proposals for how to reform the housing finance system and we look forward to continuing to work with MBA and others to promote reforms to the housing finance system to put more private capital in front of taxpayer risk and to create a more sustainable housing finance system that works for market participants, taxpayers and consumers.
“For 60 years, MI has provided effective credit risk protection for our nation’s mortgage finance system. This time-tested form of private capital should be the preferred method of absorbing credit loss in front of any government guaranty, helping to minimize taxpayer risk while ensuring mortgage credit remains accessible.”
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.