INNOVATIVE ALTERNATIVE MARKETS PROGRAMS
Arch is committed to delivering traditional and innovative mortgage risk transfer products that provide meaningful and affordable capacity to the U.S. housing sector. Beyond traditional flow mortgage insurance, Arch can meet the unique needs of industry participants, including portfolio lenders, government agencies and institutional investors.
Our financial expertise and sophistication allow us to offer solutions such as structured coverage, insurance-linked securities and other capital markets executions. We provide tailored, strategic options to meet regulatory requirements and disperse risk to sustain profitability during all market cycles.
Arch Mortgage Guaranty Company (AMGC) is focused on providing structured MI solutions to Arch MI’s customers – including portfolio lenders, government agencies and institutional investors – to support their need to meet internal risk management goals or minimize required regulatory capital.
Our experience includes solutions for large banks, mortgage banks, community banks, credit unions and other entities participating in mortgage credit risk transactions. You can count on Arch for standard-level coverage on high LTV affordable housing loans originated with no loan-level MI or thin-level coverage on specific loan programs or entire portfolios. We can also provide supplemental coverage or build a structure to meet your specific needs.
MORTGAGE RISK TRANSFER
Arch Mortgage Risk Transfer (Arch MRT), a Washington, D.C.-based subsidiary of ACGL, provides an innovative approach to facilitating credit risk transfer (CRT) for the Government Sponsored Enterprises (GSEs) — Fannie Mae and Freddie Mac.
Arch MRT is designed to bring additional private capital into the U.S. mortgage marketplace. Arch MRT transfers 100 percent of the mortgage credit risk from the GSEs to a panel of diversified, well-capitalized and highly rated (re)insurers that provide high-quality collateral assets in trust.
This structure encourages additional participants and capital to support first-loss exposure in mortgages, which reduces taxpayer exposure to mortgage credit risk. Additionally, the high-quality panel of (re)insurers competitively bid through a transparent process to provide, over the long term, lower cost mortgage insurance for borrowers.
CREDIT RISK ADVISORY SERVICES
Arch Credit Risk Services Inc. offers clients such as reinsurers the opportunity to leverage the extensive credit risk management, mortgage underwriting and analytical expertise of Arch’s Global Mortgage Group, which includes Arch MI, the largest provider of mortgage insurance in the U.S.
Arch was a participant in the first CRTs placed in 2013 to transfer GSE risk to private capital and has remained actively engaged in CRT risk share transactions. Major reinsurers and other interested parties can tap our deep understanding of the U.S. mortgage market as well as existing systems and professionals to expedite their entry into this expanding field without waiting to build out analytics and processes or hire staff.
Arch issues Mortgage Insurance-Linked Securities (ILS) through its subsidiary, Bellemeade Re, which is a special purpose reinsurer. Each issuance covers a portfolio of mortgage insurance policies issued by Arch MI. In 2017, Arch completed the first mortgage insurance-linked transaction to be rated (the senior M-1 class note received a rating of BBB from Morningstar).
With ILS, Arch gains not only a critical risk management tool that reduces required capital and mitigates losses in stress scenarios, but also feedback from third parties on the risk and capital management aspects of our business.
Arch has executed four Bellemeade Re transactions and plans to execute two per year, subject to market conditions.