Mortgage

USMI’s Lindsey Johnson on Biden’s tax credit and how it impacts insurers

This week, HousingWire Editor in Chief Sarah Wheeler interviews Lindsey Johnson, president of USMI, a private mortgage insurance association, comprised of five of the six mortgage insurance companies in the United States.

In this episode, Johnson explains the unique challenges currently facing mortgage insurers, four principles USMI considers essential to housing policy reform and whether or not Biden’s proposed first-time homebuyer tax credit could change the need for private mortgage insurance.

Here is a small preview of the interview, which has been lightly edited for length and clarity:

Sarah Wheeler: The Biden administration’s focus on helping first-time homeowners and underserved borrowers has already resulted in a lot of legislative and executive action, and there is more to come. Regarding the proposed first-time homebuyer tax credit: would that be a game-changer for people with lower incomes or first-time homebuyers? And would it change the need for private mortgage insurance?

Lindsey Johnson: It’s important to know that homeownership has been on the rise over the past few years, even during the COVID-19 pandemic. As I mentioned before, a deeper look at who are becoming homeowners reveals just how difficult it can be for some homebuyers to break into the market. Data also highlights some of those racial and economic gaps that still exist. In fact, U.S. Census data for the third quarter of 2020 reveals that homeownership among whites was over 75%, compared to nearly 51% for Hispanic households, and 46% for Black households. This could indicate that minority borrowers who are qualified for home financing might face a number of barriers in the home-buying process. We also know COVID-19 has compounded the racial and economic gaps for millions of low- to moderate-income families who lost their jobs and are facing financial insecurity. The Urban Institute and many other groups have looked at these issues, and are finding that these borrowers are much more likely to face financial hardships, and are at a much greater risk of not being able to pay their rent or their mortgage payment due to the impacts of the pandemic. So, we’ve got to focus on the pandemic, and its impact on borrowers, particularly minority borrowers. We know the Biden administration is doing that, and we are going to continue to support them in those efforts.

The Housing News podcast explores the most important topics happening in mortgage, real estate, and fintech. Each week a new mortgage or real estate executive joins the show to add perspective to the top stories crossing HousingWire’s news desk. Hosted by Sarah Wheeler and produced by Alcynna Lloyd.

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