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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For Immediate Release

December 1, 2015

Media Contacts

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

USMI Statement on Highway Bill Passage

Statement by Lindsey Johnson, President and Executive Director of USMI

“USMI applauds the conference agreement for a multi-year surface transportation authorization bill, one that importantly continues to reject the use of mortgage credit risk guarantee fees (g-fees) charged by the housing finance enterprises, Fannie Mae and Freddie Mac, as a source to finance the extension of federal highway programs.

USMI members are grateful that Congress refrained from adding an additional fee to mortgages for unrelated expenses, which would pose undue and unnecessary costs to current and future homeowners.”

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For Immediate Release

December 1, 2015

Media Contacts

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

USMI Statement on MBA Letter to FHFA Director Watt

Yesterday, the Mortgage Bankers Association (MBA) sent a letter to FHFA Director Mel Watt urging action to reduce the continued taxpayer risk exposure posed by the housing GSEs, Fannie Mae and Freddie Mac. The letter specifically calls on the FHFA to require greater use of up-front risk sharing by the GSEs, particularly with deeper private mortgage insurance (MI) coverage, to de-risk loans before they are acquired by the GSEs.

MBA President and CEO Dave Stevens highlighted the “imperative that the GSEs reduce their retained risk in order to avoid any increase in taxpayers’ investment in the enterprises,” and stated that “multiple forms of up-front risk sharing should be piloted including deeper cover mortgage insurance (MI).” Stevens goes on to say that risk sharing “should not advantage certain lenders relative to others” and that “[the MI] approach would be operationally easiest for the vast majority of lenders.” In addition, the MBA letter detailed reasons why the MI industry is such a reliable counterparty and well positioned to bear additional housing finance risk.

USMI could not agree more. The MI industry has covered more than $50 billion in claims to the GSEs since the beginning of the financial crisis, resulting in substantial taxpayer savings. USMI member companies never stopped paying claims, and never stopped writing new coverage. MIs are subject to rigorous new capital and operational standards under the Private Mortgage Insurer Eligibility Requirements (PMIERs) issued by the GSEs with oversight by FHFA. The MI industry has attracted billions in new capital since the crisis, and is well positioned to raise even more. Further, as of October 2014, MIs operate under new master policy agreements, which provide assurances about the consistent handling and payment of mortgage insurance claims and bring greater transparency and clarity to contractual protections for lenders and investors.

We look forward to working with FHFA, the GSEs and lenders of all sizes in making progress towards a more sustainable housing finance system that is less risky for taxpayers, while ensuring access to creditworthy borrowers.

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For Immediate Release

November 16, 2015

Media Contacts

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

USMI Statement on Status and Solvency Of the FHA Insurance Fund

Today, the Federal Housing Administration (FHA) reported on the status of the FHA Mutual Mortgage Insurance Fund (Fund), which has been below the statutory 2% minimum capital ratio since 2009. Consistent with the general credit improvement regarding residential mortgages, the Fund met the minimum standard.

USMI President and Executive Director Lindsey Johnson stated: “We welcome the progress made, but caution against a false sense of security from today’s report. It is a reminder of continued taxpayer exposure to more than $1 trillion in FHA insured mortgage credit risk. The MI industry and FHA should serve as complementary ways to promote sustainable homeownership. But to do that, FHA still needs to become more financially resilient in line with the rest of the financial system, and remain focused on its core mission of serving underserved communities.”

The Fund’s current capital ratio is noteworthy because the amount of capital held relative to risks assumed has been increased in other parts of the housing finance system, but not at FHA. Updated Private Mortgage Insurance Eligibility Requirements (PMIERs)—stress-tested financial requirements developed by Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency—significantly increased claims paying capacity and capital for the MI industry. Unlike other financial entities under Dodd Frank, Federal Reserve requirements, and PMIERs, the FHA 2% minimum capital ratio has not been increased and is not subject to stress testing. For this reason, analysts such as Mark Zandi have recommended a substantial increase in FHA’s minimum capital ratio to 4.5% to reflect lessons learned from the financial crisis.

Accordingly, USMI is calling for reforms to the FHA capital standard. USMI encourages policymakers to increase the Fund’s minimum capital ratio to reduce the chances of a taxpayer bailout in future market downturns, and to stress test those levels to ensure the Fund’s financial position is more consistent with the risks assumed.

Click here for a comparison of private mortgage insurance and FHA insurance.

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(September 10, 2015) According to new data released by the Internal Revenue Service (IRS), approximately 4.7 million taxpayers benefited from a deduction for private Mortgage Insurance (MI) in 2013, up from 4.1 million in 2012.  Of the taxpayers that took the deduction for private MI, 82% of them had adjusted gross incomes between $30,000 and $100,000 and the average amount per return rose to $1,387 in 2013, up from $1,304 in 2012.  The total estimated net tax benefit topped $900 million, up from approximately $750 million in 2012.

“Mortgage insurance is helping millions of middle income families achieve homeownership,” said Rohit Gupta, President and CEO of Genworth Mortgage Insurance and Chair of U.S. Mortgage Insurers (USMI).  “Congress has recognized that MI premiums are the economic equivalent of mortgage interest and should be deductible from federal income taxes in a similar manner.  We urge Congress to ensure this important provision of the tax code is extended.”

On December 17, 2014 Congress passed a one year extension of vital homeowner tax relief that included the tax-deductible treatment of mortgage insurance premiums for low and moderate income borrowers, after it had expired at the end of 2013.  On July 21, 2015 The Senate Finance Committee approved legislation with a two year tax extension of MI deductibility, and the House Ways & Means Committee is expected to consider similar legislation in September.  USMI believes that the ability of borrowers to deduct MI premiums from federal income taxes should be made permanent.

The IRS data for 2013 is available at http://www.irs.gov/uac/SOI-Tax-Stats-Individual-Income-Tax-Returns-Publication-1304-%28Complete-Report%29

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