M.I. Companies Lower LTVs

Beginning March 3, Mortgage Guaranty Insurance Corp. will require at least 5 percent down by borrowers purchasing properties in markets it deems “restrictive,” Corporate Relations Director Katie Monfre told MortgageDaily.com in an e-mail statement.

Those markets include the states of Arizona, California, Florida and Nevada, she said. In addition, some metropolitan areas in another 15 states will also be impacted. Among the metropolitan areas are Chicago, Detroit and Washington, D.C.

Condominiums in the affected markets will require 10 percent down, she confirmed.

“We are implementing the new underwriting criteria to improve the credit risk profile of MGIC’s New Insurance Written,” Monfre stated. “MGIC is committed to providing sustainable homeownership opportunities for borrowers with less than 20% equity available for a down-payment.”

The PMI Mortgage Insurance Co. is also cutting back on LTVs.

In a filing with the Securities and Exchange Commission Friday, parent The PMI Group Inc. said changes it announced in its third quarter report to its pricing and underwriting guidelines for loans above 97 percent LTV reduced those policies to 21 percent of its business during the fourth quarter from 32 percent for all of last year. The changes were made as a result of a portfolio review and in response to higher demand for mortgage insurance on loans with LTVs above 97 percent.

“Effective March 1, 2008, PMI will institute additional underwriting guideline changes which will, among other things, preclude future mortgage insurance coverage by PMI through its primary flow channel of Above 97s,” the filing stated.

Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com.

e-mail: mtgsam@aol.com