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.
Arch obtains fully funded reinsurance protection through the issuance of mortgage insurance linked notes (ILNs) through its Bellemeade program. Under this program, Arch’s mortgage insurance subsidiaries enter into a reinsurance contract with a special-purpose insurer that issues ILNs to fund its obligation to Arch. As of December 31, 2019, the Bellemeade program has completed 10 transactions totaling more than $4.7 billion in issued securities, providing protection on $340 billion of insured mortgages.
The Bellemeade program is a critical tool used to manage capital needs and mitigate losses under financial stress scenarios while providing key insights from a broad spectrum of institutional investors regarding the housing finance environment in which we operate.