On September 8, 2014, NAR submitted comments to FHFA on its proposed draft Private Mortgage Insurer Eligibility Requirements (PMIERs) for companies that insure mortgage loans owned or guaranteed by Fannie Mae and Freddie Mac. The proposed requirements are important to NAR members as private mortgage insurance is often required for borrowers with down payments less than 20 percent. In its letter, NAR focused on three points:
- FHFA should ensure that the requirements have minimal impact on creditworthy borrowers and analyze the likelihood of mortgage insurance premium increases on insured loans.
- If private investors continue to expect mortgage insurance companies to achieve substantial return on equity, FHFA should monitor the market impact on mortgage insurance rates and monthly mortgage payments.
- PMIERs asset and liquidity requirements should be based on the performance of traditionally underwritten mortgage products and normal housing economics, not solely on economics that were dictated by the performance of risky mortgages that led to dramatic swings in prices during the previous decades housing boom.