A new product expected to be available later this year from Radian Guaranty Inc. will reduce lenders’ risk of losing mortgage insurance coverage.
The Philadelphia-based company said Wednesday that it plans to provide relief for lenders from having its policies rescinded after 12 months.
The relief is being offered through a new product, Confident Coverage, and is available as part of enhancements being made to Radian’s master policy.
The 12-month rescission relief applies to both delegated and non-delegated customers that choose to allow a full audit of their loan origination and closing files.
“Under this coverage, Radian will waive its exclusions from coverage for origination errors or negligence provided there is a successful audit of the loan and the borrower timely pays the first 12 months from their own funds,” the announcement said. “Additionally, Radian will offer rescission relief without an initial audit where the borrower has made 36 payments, if the borrower has been 30 days late no more than two times and never more than 60 days late during the first 36 months of the loan.”
Radian said it is developing the new product in conjunction with Fannie Mae, Freddie Mac and the Federal Housing Finance Agency.
Subject to pending state approvals, the new master policy is expected to become effective on July 1.
