(February 3, 2016) Policymakers are considering proposals to de-risk the Government Sponsored Enterprises (GSEs) through greater reliance on private capital, such as expanded up-front risk sharing using private Mortgage Insurance (MI).
(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.
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.
Last week, we saw several indications that momentum is growing to make the housing finance system more sustainable and reduce taxpayer exposure by further de-risking the Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac with increased front end risk sharing, in particular, by expanding private Mortgage Insurance (MI) coverage.
(December 4, 2015) “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.
(December 4, 2015) The likelihood of meaningful congressional action on reforming our housing finance system is still very low for the foreseeable future.
(December 3, 2015) 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.”
(December 2, 2015) “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 president Lindsey Johnson recently sat down for a Q&A discussion on risk sharing with DS News. Below is […]
(December 1, 2015) “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.
(December 1, 2015) 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.
(November 16, 2015) 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.
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