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Washington, D.C. — Private mortgage insurance has helped expand access to homeownership for many Americans and should be preserved to maintain this key wealth-building tool, UNC Center for Community Capital associate director Janneke Ratcliffe told a Congressional subcommittee today (July 29).

“Private mortgage insurance has long played an important role in facilitating home ownership and has recently provided an element of stability to the market,” Ratcliffe said in her testimony, “The Future of Housing Finance: The Role of Private Mortgage Insurance,” to the U.S. House of Representatives Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises. “An examination of this particular industry holds lessons that can inform the overall mortgage finance system.”

The current financial crisis has increased barriers to homeownership, particularly for minorities. An estimated 7 percent of white U.S. households who owned homes in 2006 have lost their homes or are expected to compared to 11 percent of African-American families and 17 percent of Latino households. The loss of homes, wealth and income will impact credit scores for years to come, further inhibiting the path to homeownership.

Policymakers can play an important role in reversing this trend by finding innovative, responsible ways to mortgage access to underserved markets, including enabling high loan-to-value mortgages through private mortgage insurance.

“When done right, high loan-to-value mortgages are essential for the U.S. housing system to offer opportunities and a pathway to the middle class,” Ratcliffe said. “Mortgage insurance brings significant value to the industry by deploying private capital while conducting safe and sustainable high loan-to-value lending.”

Policy makers can ensure the safety and soundness of this key housing finance tool by ensuring a level regulatory playing field is maintained; holding mortgage insurers accountable through balanced and transparent pricing, leadership in foreclosure prevention, and providing broad access to good loans; and cultivating alternatives to foster innovation and increased access to safe mortgages for underserved markets.

View her testimony.

Homeownership finance is a key area of focus for the UNC Center for Community Capital, the leading center for research and policy analysis on the transformative power of capital on households and communities in the United States. The center is part of the College of Arts and Sciences at the University of North Carolina at Chapel Hill. Its in-depth analyses help policymakers, advocates and the private sector find sustainable ways to expand economic opportunity to more people, more effectively. For more information, visit or call (919) 843-2140.

Topics(s): Affordable Homeownership, Housing Policy, Mortgage Finance, Other, Testimony
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