The Mortgage Insurance Companies of America, the trade association for the private mortgage industry, is launching a multi-million dollar promotional campaign to let consumers know they are there.

MICA is the latest organization - joining the likes of milk producers, the Plastics Council and even the National Association of Realtors - in promoting themselves to the public, even though their role is largely behind the scenes. Some observers believe MICA's real target is policy makers on Capital Hill who are currently scrutinizing the role of FHA, Fannie Mae and Freddie Mac.

According to MICA Executive Vice President Suzanne Hutchinson, the purpose of the campaign is to "educate the public about the benefits of private mortgage insurance."

"Private mortgage insurance allows some people to buy homes as much as 10 years earlier than they would have been able to," she said. "For some families, saving up for a (20 percent) downpayment can take as much as 10 years. Private mortgage insurance allows consumers to buy homes for a much smaller downpayment.

"Home ownership is good for communities."

The campaign will promote benefits such as allowing homebuyers to put as little as 3-to-5 percent down, instead of the 20 percent down payment historically required.

The campaign will feature print, radio, and on-line ads that explain the role that private mortgage insurance has played in helping an estimated 20 million American families buy homes.

The ads will appear in media outlets such as Time, Newsweek, U.S. News and World Report, The New York Times, Washington Post and Wall Street Journal.

"Most Americans are not aware of the role (private mortgage insurance) plays in helping expand our housing market -- by allowing them to buy their home sooner, for less money down," said Frank P. Filipps, chairman and CEO of Radian Guaranty Inc., and president-elect of MICA. "Our goal is to communicate the fact that with (private mortgage insurance) even Americans of modest means can enjoy the benefits of homeownership today, not someday."

In the past few years more and more institutions have taken to the airways to promote themselves directly to consumers who rarely actually feel their presence.

For instance, Fannie Mae has spent several million dollars in television advertising in the hope consumers will write in and ask for a free booklet on home ownership. Fannie Mae almost never is directly involved with consumers.

Likewise, the National Association of Realtors is believed to have spent in excess of $50 million in urging the public to use a "Realtor" - even though there is no such thing as the "Realtor Real Estate Company" and the ads cannot be brand or company specific.

Editor's note: A NAR spokesperson says that $11 million per year has been budgeted and $22 million has been expended so far in the organization's REALTOR/public relations campaign.

Observes say the real targets of the MICA ads are members of Congress who are studying whether FHA or the government-sponsored enterprises Fannie Mae and Freddie Mac have gone beyond their charters and now compete with private industry.

FHA, which was formed as a security net for banks loaning money to low-income Americans, now insures loans for almost $220,000.

MICA has argued that low-income Americans do not buy homes that are that expensive, and that FHA actually has become a government entity that is competing with the private sector.

Published: May 9, 2000

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