Month: June 2018

Press Release: U.S. Mortgage Insurers Names National MI’s Bradley Shuster As Chairman

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WASHINGTON—U.S. Mortgage Insurers (USMI) today announced that Bradley Shuster will serve as the association’s new Chairman of the Board. Shuster is the Chairman and CEO of National Mortgage Insurance Corporation (National MI) and its parent, NMI Holdings, Inc. (Nasdaq: NMIH). He succeeds Patrick Sinks, CEO of Mortgage Guaranty Insurance Corporation (MGIC). Shuster’s appointment comes at a significant time in the housing finance system, which remains at the center of national policy debates.

“The housing finance system continues to strengthen and make enhancements to safety and soundness that make it more resilient, and the private mortgage insurance industry has played a significant role in these improvements. As policymakers consider how to put the housing finance system on a sustainable, long-term path for the future, I am excited to serve as USMI’s Chairman to continue to champion the important role private mortgage insurance plays – and will continue to play – in facilitating responsible low down payment lending while protecting the government and taxpayers against mortgage credit risk,” said Shuster.

Shuster previously served as USMI’s Vice Chair. He has served as National MI’s Chairman and CEO since April 2012, and brings more than 30 years of experience in the housing finance industry to USMI’s chairmanship. He previously served in the leadership team of The PMI Group, Inc. for over a decade and was a partner at Deloitte LLP where he served as the Partner-In-Charge of the firm’s Northern California Insurance Practice and Mortgage Banking Practice. Shuster also held several consulting positions assisting private investors in the insurance industry.

“We are excited to welcome Brad as USMI’s new Chairman. His leadership and tenure in the mortgage insurance industry will be invaluable as we continue our important work of promoting homeownership and providing Americans with access to affordable and safe mortgage financing,” said Lindsey Johnson, President of USMI. “I want to also offer my profound thanks to Pat Sinks for his commitment to USMI and tireless work as Chairman for the last two years. Pat’s efforts have been vital to USMI and the mortgage insurance industry, and we are grateful that he will continue to serve on our board of directors.”

Richard Thornberry, who is the CEO of Radian Group Inc., will become Vice Chair for USMI.

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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.

Newsletter: June 2018

Posted on by dcadmin

It’s a good day to be a Washington Capitals fan! #ALLCAPS #ROCKTHERED! As summer heats up, so do several issues and developments in the housing industry. This week USMI released a new report on how private mortgage insurance (MI) has helped nearly 30 million homeowners nationwide for more than 60 years.  In addition, the Federal Housing Finance Agency (FHFA) received a number of comment letters on its Notice of Regulatory Review process, including from USMI and the Mortgage Bankers Association (MBA), among others. Housing has also been a big topic in Congress lately as the U.S. Senate voted to confirm Brian Montgomery as the new Federal Housing Administration (FHA) Commissioner, and the Senate Committee on Banking, Housing, and Urban Affairs held a hearing on Fannie Mae and Freddie Mac’s (the GSEs) 10 years of conservatorship. And last but certainly not least, June is National Homeownership Month and we recognize the National Fair Housing Alliance, which will host its annual conference next week that celebrates the 50th Anniversary of the Fair Housing Act.

  • USMI releases new report on private MI’s role in homeownership nationwide. USMI released a national report on the role of private MI in all 50 states and the District of Columbia. The report found that nearly 30 million homeowners have been served by MI for more than 60 years, and breaks down low down payment mortgage lending with MI in all 50 states. The report also underscores the historic importance of MI, how MI has helped promote homebuying in the U.S. especially with first-time buyers, and the protections that MI provides to American taxpayers and the federal government. The complete report on MI in the U.S. is available here. All 50 states fact sheets, plus data for the District of Columbia, are available here.
  • Trades, including USMI and MBA, submit comment letters on FHFA Notice of Regulatory Review. This week, USMI submitted a comment letter to the FHFA on its Notice of Regulatory Review as part of the agency’s five-year Regulatory Review Plan, which identifies agency rules that should be changed or modified. In its letter, USMI suggests that FHFA should reassess its “Prior Approval for Enterprise Products” interim final rule for the GSEs, because though the regulation establishes a process for the GSEs to obtain prior approval from the FHFA for new products—and provide prior notice to the FHFA for new activities—the regulation is “unused [since its implementation in 2009] and apparently not fit for purpose.” USMI argues that “new activities and products have the potential to significantly impact many stakeholders in the housing finance ecosystem—GSEs, lenders, private mortgage insurers, borrowers, and the American taxpayer” and therefore “stakeholders should not have to rely on mechanisms that sidestep the Administrative Procedure Act such as ‘requests for input’ to offer feedback on new activities and programs proposed by the GSEs.” Further, USMI notes that since becoming conservator of the GSEs in 2008, FHFA has not addressed the interaction between its regulatory and conservatorship authorities. For these reasons, USMI urges FHFA to “withdraw the Regulation and resubmit a new proposed rule for a formal notice and comment period with additional clarity on the FHFA’s role and authority as conservator and regulator of the GSEs, as well as a workable approach for assessing new activities and products.”As reported by Inside Mortgage Finance (subscription), MBA also submitted a comment letter urging FHFA to require public disclosure on “any notice” of new business activities being planned by the GSEs. Among other things, MBA asks that FHFA specify the factors and metrics it will consider when determining whether a new activity constitutes as a new product or new activity, and specifically calls on FHFA to modify the manner in which it addresses new activities characterized as “pilots.”
  • Brian Montgomery confirmed as new FHA Commissioner. Brian Montgomery, a respected housing expert and seasoned mortgage finance professional, was confirmed in a widely bipartisan vote to serve as President Trump’s FHA Commissioner. Commissioner Montgomery, who previously served as FHA Commissioner in the George W. Bush administration, will be responsible for overseeing the more than $1 trillion of insurance in force at the FHA as well as addressing some of the challenges facing the FHA going forward.Upon Commissioner Montgomery’s confirmation, USMI President Lindsey Johnson released a statement praising the Senate confirmation of the new FHA Commissioner: “USMI applauds the Senate for its bipartisan vote to confirm Brian Montgomery to serve as FHA Commissioner… We look forward to working closely and collaboratively with Commissioner Montgomery to create a more coordinated, consistent, and transparent housing system – a system that can expand private capital’s role in shouldering more risk in front of taxpayers in the housing market.”
  • Senate holds hearing on “Ten Years of Conservatorship” of the GSEs. The Senate Committee on Banking, Housing, and Urban Affairs recently held a hearing entitled “Ten Years of Conservatorship: The Status of the Housing Finance System,” in which FHFA Director Mel Watt testified on the GSEs’ activities over the last ten years under federal control. During his testimony, Director Watt said that FHFA has “worked with the Enterprises to develop a Conservator Capital Framework [CCF] that establishes aligned capital guidelines for both Enterprises across different mortgage loan and asset categories” and that FHFA uses the CCF to assess GSE guaranty fees, activities, and operations. Director Watt suggested that, as regulator, he believes it is important for FHFA to “articulate a view on prudential capital requirements for the Enterprises.” Director Watt suggested that FHFA will release for public comment a proposed rule for post-conservatorship risk-based capital and minimum leverage capital requirements.During the question and answer portion of the hearing, Senator Bob Corker (R-TN) focused on the CCF and asked if Director Watt agreed that “capital for these institutions should be fairly close at least to some of the larger banking institutions.” Senator Corker also spoke to the GSEs’ footprint, suggesting that “there are some areas where it [the footprint] has expanded… We have a situation now where Freddie Mac is now lending, they have become a lender their servicers.” Senator Corker noted “some of the pilot programs over the last five years have actually expanded the role of the two GSEs,” specifically pointing to Fannie Mae’s recent increase in debt-to-income ratios and its “financing Airbnb” as examples of expansions of the GSEs in the marketplace. Senator Corker said, “there has actually been an expansion of mission, and so while we have gotten the portfolios down it appears that instead of trying to decrease the footprint over time, over the last five years we are beginning to, especially in the last couple years, expand the mission.”Senator Pat Toomey (R-PA) asked Director Watt about the recent release of the IMAGIN product into the market place, and specifically “why there was not maybe even a traditional rulemaking process or a period of public comment to consider this.” Senator Toomey also questioned the recent financing of mortgage service companies, noting that “this looks like new kinds of activities, new practices, where we have not seen an explanation, an opportunity to comment and to get public input on.” Director Watt responded that “if I took public comment on every pilot that we did, we would never do any.” Senator Toomey ended his line of questions by asking Director Watt to respond in writing with an explanation for the rationale behind the program.
  • National Fair Housing Alliance celebrates 50th Anniversary of Fair Housing Act. The National Fair Housing Alliance will hold its annual conference next week celebrating the 50th Anniversary of the Fair Housing Act. The conference, titled “The Fair Housing Act at 50: Making Every Neighborhood a Place of Opportunity” will be held June 9 through 12 and aims to bring together thought leaders and experts on civil and human rights, housing, lending, insurance, education, transportation, health, environmental justice, and community development to examine achievements made under the Fair Housing Act. The conference will also observe the current barriers to fair housing and inclusion, and what is on the horizon in the coming years. More information about the events commemorating the 50th Anniversary of the Fair Housing Act can be found here.

Report: Texas Ranks First in U.S. for Number of Homebuyers Who Secured Home Financing Thanks to Private Mortgage Insurance

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Findings Demonstrate Important Contributions by Private Mortgage Insurance to Texas Homeownership

WASHINGTON — U.S. Mortgage Insurers (USMI), the association representing five of the six top private mortgage insurance (MI) companies in the United States, today released a report on the role of private MI in Texas. The report found that 79,030 homeowners in Texas secured a home loan with private MI in 2017, which ranks first in the nation in terms of the number of homeowners helped with MI, and breaks down low down payment mortgage lending in Texas.

“Private mortgage insurance has helped millions of first-time and middle-income homebuyers across the United States for more than 60 years and has had a tremendous impact in supporting homeownership in Texas. This report confirms what we have long known: MI is a critical piece of the U.S. housing finance system, helping Texans realize the dream of homeownership while providing important protections to Texas taxpayers,” said Lindsey Johnson, President of USMI. “For decades, low down payment borrowers in Texas have relied on MI to help them affordably and responsibly buy a home, and MI will continue to serve countless more prospective Texas homebuyers in the years to come.”

For many Texans, the biggest hurdle in buying a home is the 20 percent down payment they think is required for mortgage approval. It would take the average Texas homebuyer 18 years to save the full 20 percent down payment for a home. MI helps bridge the down payment gap so borrowers can obtain the financing needed to purchase a home, and in doing so allows Texas homeowners to build the kind of long-term wealth that comes with having equity in a home.

According to the report’s findings, 79,030 Texas borrowers became homeowners with the help of MI in 2017. Of these homeowners:

  • 55 percent were first-time buyers
  • 737 was the average FICO score
  • $233,650 was the average loan amount with MI

The report also highlights the number of minority homebuyers, including African-Americans, Hispanics, and Asian-Americans, who have successfully purchase a home in Texas. In 2017, 613,325 total loans were made in Texas, and of that total 200,279– or nearly 33 percent – were purchased or refinanced by minority borrowers.

“Since 1957, private mortgage insurance has played a critical role in helping first-time buyers and low- to moderate-income earners in Texas achieve affordable home financing. Through this successful homeownership, families can build home equity and are able to enhance their financial stability—both of which greatly benefit Texas communities,” Johnson added. “The MI industry has been a time-tested partner for millions of Americans nationwide as they become homeowners, and we will continue to offer this important and competitive product to countless more Texans in the years to come.”

The complete report can be found here and a data fact sheet on MI in Texas is available here.

Press Release: New Report Shows Importance of Private Mortgage Insurance in Helping Low Down Payment Borrowers Qualify for Mortgages in All 50 States

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TX, CA, FL, IL and MI are Top Five States in 2017

WASHINGTON, June 7, 2018 /PRNewswire-USNewswire/ — U.S. Mortgage Insurers (USMI), the association representing five of the top six private mortgage insurance (MI) companies in the United States, today released a report on the role of MI in all 50 states and the District of Columbia. The report finds that nearly 30 million homeowners have been served by MI for more than 60 years, and breaks down on a state-by-state basis low down payment mortgage lending. The report underscores the historic importance of MI, how MI has helped promote homebuying in the U.S., and the significant protection against undue mortgage credit risk that MI provides to American taxpayers and the federal government.

“Private mortgage insurance has helped millions of first-time and middle-income homebuyers across the United Statesfor more than 60 years. This report confirms what we have long known: MI is a critical piece of the U.S. housing finance system, helping Americans realize the dream of homeownership while providing important protections to taxpayers and the federal government,” said Lindsey Johnson, President of USMI. “For decades, low down payment borrowers have relied on MI to help them affordably and responsibly buy a home, and MI will continue to serve countless more prospective homebuyers in the years to come.”

The report looks at how MI helps bridge the down payment gap that affects many borrowers and analyzes at a state level who specifically benefits from MI. The report presents data that highlights:

  • The number of years it takes to save a 20 percent down payment in all 50 states plus the District of Columbia
  • The total number of homeowners helped by MI in 2017 broken down by state—and key lending characteristics including average home price and credit scores of borrowers with MI
  • The number of minority borrowers who have obtained or refinanced mortgages broken down by state

Since 1957, 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 purchase or refinance a mortgage; of that total number of borrowers, 56 percent were first-time homebuyers and more than 40 percent had annual incomes below $75,000. The top five states in which MI was used by borrowers to purchase homes in 2017 are:

  1. Texas: 79,030 borrowers (55 percent first-time homebuyers)
  2. California: 72,938 borrowers (66 percent first-time homebuyers)
  3. Florida: 69,827 borrowers (58 percent first-time homebuyers)
  4. Illinois: 47,866 borrowers (63 percent first-time homebuyers)
  5. Michigan: 41,810 borrowers (57 percent first-time homebuyers)

 

The report also focuses on how MI reduces taxpayers’ exposure to mortgage credit risk and protects the federal government from that risk. MI serves as credit protection against mortgage credit risk in the event of a borrower defaulting 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.

“Coming out of the financial crisis, the MI industry is even stronger with more robust underwriting standards, stronger capital positions, and improved risk management. The MI industry follows a strict set of requirements to insure mortgages acquired by the GSEs, which are known as Private Mortgage Insurer Eligibility Requirements, and has implemented Master Policy Agreements to bring more efficiency and greater transparency to payment of claims,” added Johnson. “MI has played a critical role in protecting taxpayers and the federal government from undue mortgage credit risk for six decades, and will continue to provide this important function in the housing finance system moving forward.”

The complete report on MI in the U.S. is available here. All 50 states fact sheets, plus data for the District of Columbia, are available 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.

SOURCE U.S. Mortgage Insurers

This release originally appeared on PR Newswire. Click here to view the original release.