Mortgage insurance (MI) is an important part of our housing finance system, facilitating access to low down payment mortgages and playing an important role as Freddie Mac continues to make home possible. Together with our Credit Risk Transfer (CRT) programs, MI protects Freddie Mac against loss and enables us to provide liquidity to the mortgage market, providing an important source of loss-absorbing capital.

The coordination between Servicers, MI companies and Freddie Mac involves a lot of data. As we continue to leverage technology to become more efficient, this tri-party interaction presents an obvious opportunity. Partnering with Servicers and MI companies, we developed Total MI®, a cohesive technology suite of MI tools that uses automation and efficient data exchange to streamline the MI lifecycle. The results are clear: more efficient processes, reduced risk and a better experience for everyone involved.

MI Success Has Been a Collaborative Effort

Industry support and adoption along with our ongoing relationships with MI companies have been essential in the success of Total MI. Thanks to Total MI Claims, we can offer Servicers a transparent and efficient MI claims process.

It also offers significant time savings with increased security when transmitting files and swift system-to-system completion of reconciliation outreach requests.

Total MI’s data transparency allows us to reconcile most of our loan portfolio with active MI coverage, ensuring tri-party alignment. The benefit of our collaboration has led to a push for industry-wide adoption of Freddie Mac application programming interfaces (APIs).

Data Quality Drives Accurate Calculations

Paramount to this initiative is consistent access to data. Total MI Reconciliations helps boost data quality for Freddie Mac, Servicers and MI companies. It digitizes and simplifies the process of verifying MI details including coverage status, premium plan and coverage percentage for newly funded loans and loans submitted with post-fund data corrections, helping successfully conduct downstream MI activities.

When a loan defaults, Total MI Claims ensures accurate calculation of the claimable amount and expected claim payment. It also provides reporting to help Servicers understand the status of MI claims, which ensures that we all work together towards a perfected claim and a timely payment, and that Servicers avoid unnecessary financial exposure.

Leadership’s Depth and Breadth of Expertise Add Cohesion

Total MI is the result of leadership that understands the MI lifecycle. Before assuming the role of Vice President and Head of Servicing for Single-Family Portfolio and Servicing, Mike Reynolds served as Vice President of Credit Risk Transfer (CRT) in Freddie Mac’s Investments and Capital Markets Division, where he was also responsible for MI.

While CRT and MI both transfer risk to sources of private capital, they do so in different manners. Under Reynolds, Freddie Mac’s CRT program introduced the pioneering STACR® (Structured Agency Credit Risk) and ACIS® (Agency Credit Insurance Structure®) solutions. His innovation significantly diversified our sources of loss-absorbing capital and changed how the GSEs and the MI industry manage risk.

Reynolds is a firm believer in the power of data. He spearheaded the publication of a Single-Family historical loan level dataset in 2012, which provided unprecedented transparency to the market. Over the years, he’s also pushed for additional disclosure, such as mark-to-market loan-to-value (MTMLTV) and updated credit scores.

While cultivating the necessary relationships with (re)insurers and capital markets investors necessary to make CRT the success it is, Reynolds was also intentional in building a strong relationship with MI companies, providing an open forum for discussions and feedback. He pioneered a tri-party approach that’s accurate, flexible and scalable. That’s Total MI.

Technology Alliances Will Advance the Work

While Total MI increases data accuracy, the work is far from complete, and we’re excited to continue these innovations and collaborations. Freddie Mac is committed to providing accurate and reliable data to the market. Total MI’s robust controls and enhanced features help us achieve our goals. Discover how Total MI can add efficiency, transparency and automation to your organization.