Risk-Based Pricing for Mortgage Insurance

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At least one mortgage insurance company will begin offering premiums that are based a loan’s risk profile determined by a variety of underwriting factors.

The company is National Mortgage Insurance Corp., which Monday announced its new risk-based pricing platform, Rate GPS.

With the platform, Emeryville, California-based National MI
assesses a variety of loan characteristics to more closely align its premium rates to the risk associated with individual loans.

Among the factors evaluated to determine pricing are
credit scores, loan-to-value ratios and debt-to-income ratios.

Overall rates at National MI are expected to be reduced by less than 10 percent as a result of Rate GPS.

“With Rate GPS, National MI leverages the modern analytical and modeling tools available through its state of the art IT platform to evaluate and assess historical loan data to produce rates that are closely calibrated to loan risks,” the statement said. “The technology supporting Rate GPS is intended to deliver a smooth and seamless pricing process for lenders and their borrower customers.”

National MI Chief Executive Officer Brad Shuster noted in the statement the risk-based pricing solution will help the company effectively manage risk and quickly respond to market changes.

Rate GPS will be available beginning June 4.

Mortgage Expert

Mortgage Daily Staff



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