Several leading mortgage insurance providers for the industry have announced that if the enhanced Private Mortgage Insurer Eligibility Requirements (PMIERs) announced by the Federal Housing Finance Agency (FHFA) went into effect today, they would be in complete compliance.
The enhanced PMIERs were officially announced on April 17 following a two-month comment period from July to September of last year. They will go into effect on December 31, 2015. PMI vendors must meet the enhanced standards before they can insure Fannie Mae- and Freddie Mac-backed loans, and they must maintain those standards for the life of the business relationship.
Walnut Creek, California-based Arch Mortgage Insurance said that based on the company's interpretation of the PMIERs and the company's current portfolio and balance sheet, Arch MI's available assets exceed the minimum required assets specified by the final PMIERs.
"We are pleased that FHFA has finalized the PMIERs and believe that setting this standard for the private mortgage insurance industry provides confidence in the value of mortgage insurance," said David Gansberg, President and CEO of Arch MI. "Arch MI was in compliance with the draft PMIER financial requirements and we are proud to be fully compliant now with the financial requirements in their final form. This affirms our financial strength as an insurance counterparty. We are strongly positioned to continue to meet the needs of our customers."
Bermuda-based Essent Group Ltd. said that as of March 31, 2015, the company had sufficient assets in its insurance to meet the total risk-based required asset amount specified by the final PMIERs.
"We have been very supportive of the risk-based capital framework underlying the PMIERs and strongly believe that sound standards which are transparent and consistently enforced strengthen our industry,” said Mark Casale, Chairman and CEO of Essent. "Now that they are final, the PMIERs will serve as an important set of national standards that give industry counterparties more transparency into the claims paying capacity of private mortgage insurance companies, including Essent."
Greensboro, North Carolina-based United Guaranty said the implementing of new PMIERs is a "critical and necessary" step that will allow the mortgage industry to incorporate lessons learned during the financial crisis moving forward.
"As the highest-rated, GSE-approved insurer, United Guaranty is well positioned to meet these requirements,” United Guaranty President and CEO Donna DeMaio said. "We will be fully compliant with the eligibility standards on the effective date, December 31, 2015."