This week David H. Stevens, President and CEO of the Mortgage Bankers Association (MBA) issued the following statement on Freddie Mac's new credit-risk transfer offering:
"MBA appreciates Freddie Mac's efforts to bring more private capital into the market through the credit-risk transfer offering they recently announced. In this early stage of the credit risk transfer market, it is important to experiment with different transactions and structure types to evaluate their long term economic and competitive impact. Mortgage insurance offers a well-developed, scalable solution that would benefit consumers and is something that all lenders could use today.
"Going forward, we would like to see FHFA and the GSEs take advantage of the existing lender-MI company relationships to share risk through deeper loan level primary mortgage insurance, as opposed to the GSE negotiated version that they just rolled out. Otherwise, we are wasting the competitive value of mortgage insurance companies both working directly with lenders, as well as being able to pass value directly to consumers."