We have reviewed PMIERS 2.0 and concur with analysts who believe the new standards are less stringent than the MIs feared and thus little obstacle to continued loan-level MI unless or until the GSEs come up with something they like better. That said, it’s simply impossible to say if PMIERS 2.0 sets MI capital too high, too low, or just right. The regulatory-capital framework for mortgage risk is increasingly incoherent, leaving few clear results other than lots more arbitrage and still fewer mortgages for LMI households.
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