USMI Announces New Housing Finance Reform Principles

Calls for Private Capital to Absorb All Expected Credit Losses & Protect Taxpayers

(June 6, 2016) – U.S. Mortgage Insurers (USMI) today announced a new set of housing finance reform principles to help evaluate and shape reform efforts aimed at ensuring that American consumers have access to mortgage credit while better shielding taxpayers from housing-related risks.

“These principles set forth a sensible roadmap for much needed reform to put the housing finance system on a more sustainable path.  Policymakers should keep the features that work well while reducing risks at the GSEs as much as possible,” stated Lindsey Johnson, USMI President and Executive Director.

USMI announced the following principles for reform:

• Protect Taxpayers. Private mortgage insurance (MI) and other forms of private capital should absorb all credit losses in front of any government guaranty.
• Promote Stability. A goal of the reformed system should be to promote stability in housing finance.
• Ensure Accessibility. A reformed system should ensure broad access to mortgage finance for creditworthy borrowers and participation by lenders of all sizes and types.
• Foster Transparency. There should be a consistent, transparent, and coordinated approach to the federal government’s housing policy among all government agencies and entities.

New polling also shows strong public support for housing finance reform efforts that rely on private capital to assume more of the risk currently borne by the GSEs.  Among the findings:

• Half of respondents (49%) believe the government is not doing enough to reduce the risks of another housing-related taxpayer bailout;
• Most (48%) believe the private sector should bear the responsibility for the risk of losses on bad loans;
• The majority (54%) would support a law requiring more private capital – such as additional mortgage insurance – to reduce the amount that taxpayers have to pay if borrowers default on their mortgage; and
• 71% are concerned about the return of loans with features (including interest only or zero down) that independent government reports and third-party analysts have noted contributed to the mortgage crisis.

A complete description of the USMI housing finance reform principles can be found here and a summary of the polling administered by Morning Consult on behalf of USMI between October 8-12, 2015 and April 7-9, 2016, 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 (MI) 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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Brendan Kihn currently serves as the Government Relations Director of USMI. USMI is the nation’s leading private mortgage insurance association, comprised of five of the six U.S. mortgage insurance companies in the country.

Brendan previously worked at Falcon Capital Advisors LLC where he served as a Policy Analyst, providing research and analysis on regulatory compliance and business operations issues impacting the housing finance system.  Prior to that, Kihn served as an Interim Director and Legislative Analyst at the Financial Services Roundtable, where he managed the Advocates for Insurance Modernization organization and tracked regulatory and legislative developments affecting the property and casualty insurance industry.

Brendan is a graduate of Quinnipiac University School of Law and the University of Michigan.

For Immediate Release

February 17, 2016

Media Contacts

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

USMI Announces 2016 Policy Priorities

Outlines Solutions to Protect Taxpayers and Enable Homeownership

(February 17, 2016) U.S. Mortgage Insurers (USMI) today announced its 2016 public policy priorities, aimed at helping ensure broader access to sustainable homeownership while reducing taxpayer risk.

“As policymakers look for more ways to increase the role of private capital to the make housing finance system less risky and more sustainable, USMI is well positioned to be an active voice in promoting the proven benefits and reliability of MI for taxpayers and borrowers,” stated Lindsey Johnson, USMI President and Executive Director.  “The initiatives we are announcing today offer real solutions to further the important goals of housing finance reform.”

USMI announced the following proposed policy actions to expand access to affordable credit and reduce taxpayer risk through the use of MI, including:

• Setting and Using GSE Fees;
• Extending and Preserving Tax Deductibility of MI;
• Protecting Taxpayers by Expanding Use of Deeper MI in GSE Risk-Sharing;
• Strengthening the Role of MI in Comprehensive Reform Legislation;
• Striking the Right Balance for Taxpayers in Establishing Complementary Roles for FHA and MI; and
• Strengthening State Regulation of MI.

A complete description of the policy initiatives can be found here.

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For Immediate Release

January 14, 2016

Media Contacts

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

USMI Names MGIC’s Pat Sinks as Vice Chair

Expanded Leadership Team Reflects Growing Industry Presence

(January 14, 2016) U.S. Mortgage Insurers (USMI) today announced that Patrick Sinks, Chief Executive Officer of MGIC, will serve as the organization’s Vice Chair. This new role reflects the growing presence in Washington of the MI industry since the organization’s formation in March, 2014, and builds on the appointment in September, 2015 of Lindsey Johnson as USMI’s President and Executive Director.

“As policymakers look for more ways to increase the role of private capital to protect taxpayers and expand homeownership, this is a critical time for housing finance policy and the MI industry,” said Sinks. “I look forward to helping USMI be an active voice in Washington on housing finance policy, including reducing taxpayer risks by expanding GSE risk sharing with the proven reliability of MI.”

“Pat brings a wealth of experience and expertise to our mission to inform housing finance policy,” said Rohit Gupta, Chair of USMI and President and CEO of U.S. Mortgage Insurance at Genworth. “We will be actively engaged in many important policy discussions this year, and in Pat’s new capacity as Vice Chair, he will greatly enhance those efforts.”

Patrick Sinks has served as MGIC Investment Corporation’s Chief Executive Officer since March 2015. Pat brings more than three decades of experience in the mortgage insurance industry to USMI, beginning his career with the company at its primary subsidiary Mortgage Guaranty Insurance Corp. (MGIC) in 1978. Pat has served numerous roles at MGIC, including President and Chief Operating Officer of both MGIC Investment Corporation (MTG) and MGIC prior to being named Chief Executive Officer.

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USMI Statement on FHFA 2016 Scorecard 

Today, the Federal Housing Finance Agency (FHFA) released the 2016 Scorecard for Fannie Mae, Freddie Mac and Common Securitization Solutions.  USMI welcomes the continued attention by FHFA in the scorecard to de-risk the Government Sponsored Enterprises (GSEs) through greater sharing of credit risk with the private sector.  At the same time, USMI remains committed to working with FHFA and the GSEs on specific steps to increase the amount and levels of credit risk transferred and to take greater advantage of the benefits of front-end risk sharing.

“We look forward to responding to the Request for Input and encourage FHFA to proceed in order to take advantage of expanded front-end risk sharing, particularly with private mortgage insurance (MI), to more fully protect taxpayers from exposure to housing related losses,” said Lindsey Johnson, President and Executive Director of USMI.  “After three years of largely back end risk sharing transactions, the time is right to move forward with a more balanced approach.”

As policymakers continue to work toward de-risking the GSEs in the absence of comprehensive reform, expanded front-end risk sharing with MI should be a part of the solution.

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For Immediate Release

December 3, 2015

Media Contacts

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

New Paper from Goodman, Parrott and Zandi Analyzes Risk Sharing Options

As momentum is growing to further de-risk the Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac, it is essential that policymakers have access to rigorous and thoughtful analysis of all the options.  To that end, Laurie Goodman, Jim Parrott and Mark Zandi released an excellent paper – Delivering on the Promise of Risk Sharing – that examines the various front and back end risk sharing options in order to facilitate “a full understanding of the trade-offs will only be understood as the different structures are tested in the market.”

USMI welcomes this kind of rigorous analysis, which concludes that frond end risk sharing with MI potentially satisfies all of the essential goals – from reducing taxpayer risk and maintaining broad borrower access to credit to minimizing volatility and maximizing transparency.  All policymakers who are intent about how to de-risk the GSEs in the absence of comprehensive housing finance reform are well-served and should be guided by this thoughtful analysis.

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