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In the midst of rising interest rates and higher home prices, HousingWire sat down with David Gansberg, CEO of Arch MI, to find out what his company is doing to help lenders expand opportunities for homeownership.

HousingWire: Arch Capital Group acquired United Guaranty from AIG at the end of last year. What does that acquisition mean for Arch MI?

GansbergDavid Gansberg: The acquisition of United Guaranty expands the scale of Arch’s existing mortgage insurance businesses by combining United Guaranty’s position as the market leader in the U.S. private mortgage insurance industry with Arch’s financial strength and history of innovation — further diversifying our business profile and customer base.

This expansion of our mortgage insurance business complements our strengths in the specialty insurance and reinsurance businesses, which continue to be central to our global operations. Diversity across segments and product lines remains fundamental to our corporate strategy and allows us to deploy our capital to those areas offering the best opportunities at any given time. 

Teams at both companies worked together to make this integration seamless, and we now have an impressive fusion of talented professionals from both companies, applying their expertise in operations and risk management to provide our clients with the best products and services in the industry.

HW: How does Arch MI’s RateStar product help lenders attract Millennials and other homebuyers?

DG: The expectations of Millennials differ in some fundamental ways from other generations. Because they have been conditioned by technology since childhood, they are focused on speed, convenience and service that recognizes their individuality.  Arch MI can help lenders to meet these expectations and address Millennials’ price-sensitivity with solutions that give them a crucial competitive edge.

We’ve built a more sophisticated and efficient way to price mortgage insurance, which is especially important as lenders look to help Millennials afford mortgages. RateStar leverages the most current developments in automation and personalization to offer a dynamic pricing solution for lenders. It goes beyond conventional rate sheets to address a broader range of risk factors. 

With interest rates rising, being able to price MI more precisely gives lenders a significant competitive edge in the this market. For eligible borrowers, RateStar can mean more affordable mortgages with lower monthly payments overall. Millennials will also appreciate how this technology facilitates a personalized evaluation of the risk represented by their individual loan scenarios.

Lenders can enter specified loan characteristics and obtain a premium rate quote instantly. Provided that the loan and borrower information submitted doesn’t change, Arch MI guarantees the RateStar final quote for 90 days, except where prevented by law, which helps to protect the lender’s pipeline.

HW: You mention rising interest rates. How can Arch MI help lenders reach their origination goals in this environment?

DG: Lenders are under increasing pressure this year, because housing inventory continues to be limited, rates are going up and the credit box is still pretty tight. Arch MI understands the environment lenders are operating in, which is why we’ve developed a number of ways to help. We’ve talked about RateStar, which goes beyond the traditional mortgage insurance characteristics, taking into account other risk factors to match the loan to Arch MI’s most competitive rates, so originators may compete more effectively, qualify more borrowers and close more loans.

In addition, in 2015 we launched Arch Mortgage Guaranty Company (AMGC) specifically for mortgage loans that originators intend to retain in their portfolios or include in private securitizations. AMGC is a separately capitalized entity and not subject to GSE requirements, and it is uniquely positioned to insure various types of prime, standard and non-standard mortgages.. 

Arch MI has a commitment to real innovation, and we will continue to leverage our solutions to transform and expand lending horizons for our customers. 

To find out more about RateStar click here.