Changes to lending requirements at MGIC will make it easier for some applicants with limited credit to qualify for a mortgage.
The Milwaukee-based firm will no longer base loan eligibility or pricing on co-borrowers who don’t have a valid credit score.
Instead, the mortgage insurer will use the lowest borrower indicator score among all borrowers who do have a valid credit score.
The updates were outlined Wednesday in MGIC Bulletin 04-2016.
On the MGIC Go! programs, loans that have an “approve” response from the Fannie Mae Desktop Underwriter Version 10.0 are eligible.
Additionally for MGIC Go!, on DU “Approve/Eligible” or an “Accept/Eligible” on Freddie Mac’s Loan Prospector,
lenders that are authorized to submit loans through the Delegated MI Underwrite Program can submit through a delegated channel even if none of the borrowers has traditional credit.
“We will implement changes that will enhance underwriting and pricing on many loans that include nontraditional credit,” the bulletin stated. “In addition, we will accept loans with an Approve/Eligible response from Fannie Mae’s Desktop Underwriter Version 10.0, incorporating trended credit.”
MGIC noted, however, that all borrowers must have a valid credit score on
DU “Approve/Ineligible” or LP “Accept/Ineligible” for MGIC Go!
The changes impact M.I. applications that are received on or after June 25.
