Category: Comment Letters

Letter: USMI Welcomes Effort to Increase Reliance on Private Capital In Housing Finance

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USMI delivered the following letter to members of the Senate Banking Committee last night:

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May 20, 2015

 

The Honorable Richard Shelby

Chairman
U.S. Senate Committee on Banking, Housing, and Urban Affairs
534 Dirksen Senate Office Building
Washington, DC 20510

Dear Chairman Shelby:

U.S. Mortgage Insurers (“USMI”) welcomes the effort to make progress on increasing the reliance on private capital in housing finance as part of consideration by the Senate Banking Committee of the Financial Regulatory Improvement Act of 2015.

Specifically, USMI supports Section 706, which calls on the Government Sponsored Enterprises (“GSEs”) to engage in front-end risk sharing transactions. This directive would make greater use of private capital to “de-risk” the GSEs, lower the exposure and costs for the enterprises and taxpayers and should lower costs to borrowers. USMI supports this effort, and will continue to work with the Committee during the legislative process on clarifications to ensure the legislation has the intended effect of being “transaction neutral” to permit a variety of methods of up front risk sharing, with all risk sharing counterparties held to equivalent standards.

Promotion of greater up front risk sharing will help build a strong, stable housing finance system that provides access to sustainable and affordable mortgage credit while protecting taxpayers. We look forward to favorable action on this important effort.

Sincerely,

 

U.S. Mortgage Insurers

cc: The Honorable Sherrod Brown, Ranking Member

All members of the Senate Banking Committee

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Press Release: USMI Supports Affordable Housing Principles and Calls for Transparency in FHFA Duty to Serve Plans

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USMI Supports Affordable Housing Principles and Calls for Transparency in FHFA Duty to Serve Plans

USMI submitted comments on the Federal Housing Finance Agency’s (FHFA’s) proposal for how the government sponsored housing enterprises Fannie Mae and Freddie Mac should serve underserved markets.  USMI supports both principles of facilitating the financing of affordable housing for low-to-moderate income families consistent with the Enterprises’ overall public purposes while maintaining a strong financial condition and reasonable economic return.  To that end, among other things USMI calls for full transparency into the economics of the Plans to ensure policy aims are met in the most efficient way available.  USMI looks forward to working with MI customers, FHFA, the Enterprises, and other market stakeholders to help the Enterprises meet their “Duty to Serve” obligations.  The text of the USMI comment letter can be found 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.

 

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Letter: Joint Letter on G-fees

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USMI Joins Letter on G-fees

In letters to House and Senate Budget Committee leadership, USMI joined a broad group of more than a dozen housing organizations urging Congress to use GSE G-fees for their intended purpose, to support homeownership stability.

“By preventing g-fees to be used as a funding offset, this budget point of order gives lawmakers a vital tool to prevent homeowners from footing the bill for unrelated spending,” the letters said. “We urge you to once again include it in this year’s Budget Resolution.”

Click here for the full text of the House and Senate letters.

Statement: Moore – Stivers Letter to FHFA Director Watt

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For Immediate Release

December 4, 2015

Media Contacts

Robert Schwartz 202-207-3665 (rschwartz@rasky.com)

USMI Statement on Moore – Stivers Letter to FHFA Director Watt

“Yesterday’s bipartisan letter from Representatives Gwen Moore (D-WI) and Steve Stivers (R-OH) to Federal Housing Finance Agency (FHFA) Director Watt is further evidence of the growing bipartisan support for de-risking the Government Sponsored Enterprises (GSEs) with additional risk sharing transactions to reduce taxpayer exposure to losses from another housing downturn.  USMI commends Representatives Moore and Stivers for urging FHFA to take additional steps to incorporate front end risk sharing, including with MI.

The letter expresses concern ‘about the lack of balance between ‘front-end’ and ‘back-end’ risk sharing.  With FHFA having affirmed the importance of using private capital whenever practicable and equitable in credit-risk sharing transactions, we wanted to urge additional exploration and refinement of credit-risk sharing techniques that are consistent with other federal housing goals.’

Front-end risk share transactions transfer the risk of loans before they ever reach the GSE’s balance sheets.  The letter by Reps. Moore and Stivers joins a bipartisan letter in the U.S. Senate by Sens. Mark Warner (D-VA), Bob Corker (R-TN), Heidi Heitkamp (D-ND), Mike Crapo (R-ID), Jon Tester (D-MT) and Dean Heller (R-NV) which also encourages FHFA to expand and better define the development of credit risk transfer programs.”

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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.

Download as PDF

Statement: Luetkemeyer – McHenry Letter to FHFA Director Watt

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For Immediate Release

December 2, 2015

Media Contacts

Robert Schwartz 202-207-3665 (rschwartz@rasky.com)

USMI Statement on Luetkemeyer – McHenry Letter to FHFA Director Watt

 

Statement by Lindsey Johnson, President and Executive Director of USMI

“Today, Representatives Blaine Luetkemeyer and Patrick McHenry sent a letter to Federal Housing Finance Agency Director Watt ‘regarding the transactions that Fannie Mae and Freddie Mac (the Enterprises) enter in order to share mortgage credit risk with private market participants.’ According to the letter, ‘[w]hile we strongly support these transactions as a mechanism for mitigating credit risk to the Enterprises and U.S. taxpayers, we are concerned that the focus for these transactions has been too heavily concentrated on back-end credit risk sharing. Accordingly, in order to expand the scope of risk sharing and to avoid favoring one approach to risk sharing over another, we believe that the Federal Housing Finance Agency (FHFA) should require the Enterprises to also explore and engage in diverse forms of front-end credit risk sharing.’

USMI members applaud Representatives Luetkemeyer and McHenry, Chair of the House Financial Services Committee’s Housing and Insurance Subcommittee and House Financial Services Committee Vice Chairman, respectively, for their leadership and advocacy on this important issue.

In advance of the upcoming release of FHFA’s 2016 Scorecard, taxpayers still face significant exposure to losses from another housing downturn. Front-end risk share transactions transfer the risk of loans before they ever reach the GSE’s balance sheets. As outlined in the letter, the benefits of front end risk sharing are clear. USMI agrees that there should be a greater balance between front and back end credit risk transfers. Of the several ways that the GSEs can conduct front-end risk share transactions, using MI on the front end is one of the easiest, most readily available forms that would be accessible to a vast majority of lenders today.

Momentum is growing to expand front end risk sharing with MI, and USMI members are ready to do more to de-risk the housing finance system while enhancing homeowners’ ability to borrow in an affordable way.”

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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.

Download as PDF

Comment Letter: USMI Joins Coalition on Highway Bill Funding

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(November 10, 2015) In a letter to conferees on the pending highway bill, USMI joined a broad coalition of 27 housing organizations in urging conferees to draw funds from the Federal Reserve’s surplus, rather than using GSE G-fees, to pay for the extension of the Highway Trust Fund.

The full text of the letter can be found here

Letter: Opposition Builds Against Using Mortgage G-Fees to Fund Highway Bill

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(September 17, 2015) This week, in a joint letter to the bipartisan Congressional leadership, USMI and a diverse coalition of thirty-two housing organizations reiterated their opposition to using the mortgage credit risk guarantee fees (g-fees) charged by the housing finance enterprises, Fannie Mae and Freddie Mac, as a source to finance extension of federal highway programs.  The letter states: “increasing g-fees for other purposes… imposes an unjustified burden on the housing finance system.”  “Adding an additional fee to mortgages for unrelated expenses would only increase the hurdles these families already face in achieving the American dream of homeownership”, it continues.

The full text of the letter can be found here

Letter: USMI Joins Broad Coalition Opposing Use of G-Fees To Fund Highway Bill

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(July 23, 2015) This week, USMI joined a broad coalition of nine other housing groups to send a letter to Senate leadership opposing the use of the credit risk guarantee fees (g-fees) charged by the housing finance enterprises, Fannie Mae and Freddie Mac, as a source of funding for the extension of federal transportation programs.  The letter states: “whenever Congress has considered using g-fees to cover the cost of programs unrelated to housing, our members have united to emphatically let Congress know that homeownership cannot, and must not, be used as the nation’s piggybank.”

The full text of the letter can be found here.

Letter: USMI Welcomes Effort to Increase Reliance on Private Capital In Housing Finance

Posted on by dcadmin

USMI delivered the following letter to members of the Senate Banking Committee last night:

USMI Header 750
The Honorable Richard Shelby

Chairman
U.S. Senate Committee on Banking, Housing, and Urban Affairs
534 Dirksen Senate Office Building
Washington, DC 20510

Dear Chairman Shelby:

U.S. Mortgage Insurers (“USMI”) welcomes the effort to make progress on increasing the reliance on private capital in housing finance as part of consideration by the Senate Banking Committee of the Financial Regulatory Improvement Act of 2015.

Specifically, USMI supports Section 706, which calls on the Government Sponsored Enterprises (“GSEs”) to engage in front-end risk sharing transactions. This directive would make greater use of private capital to “de-risk” the GSEs, lower the exposure and costs for the enterprises and taxpayers and should lower costs to borrowers. USMI supports this effort, and will continue to work with the Committee during the legislative process on clarifications to ensure the legislation has the intended effect of being “transaction neutral” to permit a variety of methods of up front risk sharing, with all risk sharing counterparties held to equivalent standards.

Promotion of greater up front risk sharing will help build a strong, stable housing finance system that provides access to sustainable and affordable mortgage credit while protecting taxpayers. We look forward to favorable action on this important effort.

Sincerely,

U.S. Mortgage Insurers

cc: The Honorable Sherrod Brown, Ranking Member

All members of the Senate Banking Committee

Download as PDF

Comment Letter: USMI Responds to Basel Committee Credit Risk Proposal

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For Immediate Release

March 31, 2015

Media Contacts

Robert Schwartz 202-207-3665 (rschwartz@prismpublicaffairs.com)
Michael Timberlake 202-207-3637 (mtimberlake@prismpublicaffairs.com)

USMI Responds to Basel Committee Credit Risk Proposal

U.S. Mortgage Insurers (USMI) submitted a response to the Basel Committee on Banking Supervision’s proposal, Revisions to the Standardised Approach for credit risk, which would, among other things, revise the calculation of banks’ risk weights for exposures secured by residential real estate under the Standardized Approach for calculating credit risk under the Basel capital framework.

USMI raised two primary areas of concern with the proposal: it does not appear to recognize the risk-reducing effect of private mortgage insurance in the calculation of residential mortgage risk weights, nor does it appear to recognize the risk-increasing effect of simultaneous second lien mortgages on primary residential mortgage exposures.

To address these concerns, USMI urged the Basel Committee to recognize the risk-reducing effect of mortgage insurance in the calculation of residential mortgage risk weights, pointing out several key benefits of mortgage insurance:

  • Mortgage insurance plainly reduces the risk of a residential mortgage. Mortgage insurers leverage their credit expertise and analytics to extend insurance only on those mortgage loans they believe are soundly underwritten, providing an important third party check on mortgage underwriting practices.  For example, in the U.S., private mortgage insurance has covered over $44 billion in claims to Fannie Mae and Freddie Mac (the “GSEs”) for such losses since the GSEs entered conservatorship, losses that otherwise would have been borne by taxpayers.
  • Mortgage insurers are subject to considerable prudential regulation and oversight designed to ensure that they can pay claims when due. In the U.S., for example, private mortgage insurers are subject to a robust state-by-state regulatory regime.  This regime will be complemented by the publication by the Federal Housing Finance Agency of the final revisions to the comprehensive private mortgage insurer eligibility requirements (“PMIERs”) later this year.  When finalized and implemented, the PMIERs will be a unified and transparent set of risk management, operational risk, and regulatory compliance requirements applicable to all mortgage insurers seeking to do business with the GSEs.
  • Recognizing the risk-reducing effect of mortgage insurance in the calibration of risk-weights in the Proposal would be consistent with the risk weighting approaches adopted by several Basel Committee member countries.
  • Failure to recognize the risk-reducing effect of mortgage insurance would result in more expensive mortgages, tighter mortgage credit, and less low down payment lending supported by mortgage insurance. By ignoring the beneficial effect of mortgage insurance, the proposal would require banks to hold more capital against higher loan-to-value (LTV) loans with MI than would be warranted by the actual risk.

Additionally, USMI urged the Committee to use a combined loan-to-value ratio that gives effect to simultaneous second liens for residential mortgage risk weighting, rather than the first lien loan-to-value ratio.  As written, the proposal ignores the significant risks inherent in loans with junior second liens originated at the same time on the same residence as the primary mortgage, also known as “simultaneous seconds” readily observed during the financial crisis.

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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.

Download as PDF

Letter: USMI Files Broad Tax Extender Support Letter to Congress

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Today, USMI joined 586 organizations across the country in filing a letter to the United States Senate and House of Representatives, urging Congress to act in the Lame Duck session to extend seamlessly, enhance or make permanent the expired and expiring tax provisions.

Download the Letter to the U.S. House of Representatives.

Download the Letter to the U.S. Senate.