MGIC has loosened its underwriting requirements on income documentation, asset documentation and employee expenses — among other areas.
On purchase financing, the mortgage insurer eliminated requirements that applied when the borrower retains the previous primary residence.
This includes purchase-money loans where the primary residence is either converted to an investment property or to a second home.
MGIC described the updates in
Underwriting/Rate News Bulletin No. 05.2015.
The Milwaukee-based company eased its income documentation requirements to allow the use of IRS wage-and-income transcripts in lieu of W-2s.
Also in the income category, MGIC said it will allow tip income that is reported on IRS Form 4137.
The Federal Home Loan Banks are now considered to be eligible providers of grants.
On retirement accounts, MGIC will now allow 100 percent of vested value. With stocks, bonds and mutual funds — liquidation documentation requirements have been waived as long as the value of the funds exceeds the amount of funds needed to close by at least 20 percent.
MGIC noted that it will allow one percent of the outstanding balance to be used for student loan payments when the payments are deferred and no payment amount is otherwise provided.
The mortgage insurance company will no longer require that job-related expenses be deducted for borrowers who are not on commission or who receive no more than a quarter of their total income from commission.
The revisions, which apply to MGIC Non-Go! loans, are effective for all M.I. applications
received on or after July 31.
