Several mortgage insurance companies have updated their programs and guidelines, and many of the updates enable expanded coverage. Some of the changes impact loans covered by the Making Home Affordable initiative. A new mortgage insurer, meanwhile, is one step closer to becoming operational.
Fannie Mae issued Bulletin No. SEL-2012-11 in October indicating that existing loans with investor-paid primary or pool coverage mortgage insurance needed to meet Fannie’s minimum credit enhancement requirements applicable to loans with loan-to-value ratios greater than 80 percent are now eligible for DU Refi Plus financing. But the secondary lender said that existing Refi Plus loans with investor-paid mortgage insurance with LTVs greater than 80 percent will remain ineligible.
The California Insurance Department approved National Mortgage Insurance Corp. to write mortgage insurance in the state, according to an announcement Monday from the Emeryville, Calif.-based firm. The news followed the June 2012 approval for the company to participate in an accelerated licensing process sponsored by the National Association of Insurance Commissioners.
National M.I. President and Chief Executive Officer Bradley Shuster, who previously was president of The PMI Group’s international mortgage insurance and strategic investments, called the approval a “critical step toward our operational launch.”
National M.I., which has applied for approval in all 50 states, is also seeking approvals from Fannie and Freddie Mac. The company raised $550 million in private capital earlier this year, which is expected to fund insurance on more than $30 billion in loans, and it is “on track to do business in early 2013.”
Radian Guaranty Inc. said earlier this month that it continues to support the Home Affordable Refinance Program. Radian claims to have helped more than 35,000 borrowers take advantage of HARP 2.0 — about 8 percent of its primary mortgage insurance risk-in-force. Radian clients can submit HARP loans to its website at https://radian.secure.force.com/LoanModNotification.
Earlier this month, Radian said it will begin insuring loans within the HamonyLoan platform, which allows borrowers to adjust the interest rates on their loan when rates drop at least 25 basis points without the need for a traditional rate-term refinance.
An interface was announced in October that will enable Radian insurance to be ordered through the PCLender loan origination system.
An agreement was announced on Nov. 12 by Radian Group Inc. with Financial Guaranty Insurance Co. to commute the remaining $827 million of outstanding par reinsured by Radian Asset from FGIC.
The Responsible Homeowner Reward program was announced by Radian in October. With the program, borrowers whose loans were modified under the Home Affordable Modification Program can earn cash rewards for paying on time.
A news release from United Guaranty indicated that the effective period for Secure Quote is being extended by 30 days to 90 days. Secure Quote locks in the Performance Premium pricing. The enhancement became effective on Nov. 19.
A month earlier, United Guaranty said that Fannie “DU Refer with Caution” classifications will require a manual rate quote on a loan-by-loan basis as of Oct. 20 for Performance Premium pricing. The same notice indicated that a full Uniform Residential Appraisal Report, with interior and exterior inspections, will be required on all loans. The mortgage insurer clarified that agency loans receiving an ineligible purchase recommendation will no be allowed to utilize documentation efficiencies granted by the automated underwriting systems of Fannie and Freddie.
Other changes outlined in United Guaranty’s announcement included the requirement that trade lines where no payment has yet been made cannot be used to satisfy the requirement for three trade lines evaluated for at least twelve months.
Another October bulletin from United Guaranty indicated that Geographic Quality Index and Performance Premium risk-based pricing improved in 19 markets and worsened in 13 markets.
On Nov. 17, United Guaranty started sending separate adverse action letters to affected co-borrowers that are similar to the ones sent to primary borrowers. In addition, additional letters have been created and refined to provide more detailed information about the factor or factors causing the letter to be generated. The procedure was mandated by the Fair Credit Reporting Act.
In Announcement 2012-2, Genworth Mortgage Insurance outlined underwriting guideline updates that said it will insure loans classified as “refer with caution.” The same notice indicated it will continue to accept appraisal Form 2055 for loans decisioned in Loan Prospector or prior versions of DU. Genworth also clarified that seller contributions on conforming mortgages with LTV ratios no greater than 90 percent will be limited to 6 percent; cooperative units will be eligible for cashout refinances up to 85 percent LTV; and projects with up to 40 acres will be eligible for insurance.
Genworth issued a statement in October outlining the benefits of choosing private mortgage insurance over government insurance. Among the benefits are lower premiums, cancelable policies and programs for negative-equity borrowers.
In bulletin #05 – 2012, MGIC said “Standard Monthlies” are now being processed as “ZOMP Monthlies.” The move is expected to reduce confusion and eliminate problem issues. As a result, when a loan closes in October and the a month’s premium is collected at closing, the premium would be applied to November and the next due date would be December. The changes don’t apply to HARP/Refi-to-Mod.
