Changes are being made by Radian Guaranty Inc. to its guidelines for borrowers who have high debt-to-income ratios. The action follows a similar move by another competitor.
The Philadelphia-based mortgage insurance company said it has been actively monitoring commitments on home loans where the DTI ratio exceeds 45 percent.
More specifically, Radian has been monitoring such transactions when they involve the higher DTI ratio as well as additional layers of credit.
In eBulletin #2018-1, Radian said it will no longer insure single-premium M.I.
applications with a DTI ratio in excess of 45 percent and a FICO score below 700.
It will also stop insuring single-premium transactions with greater than 45 percent DTI ratios and loan-to-value ratios of more than 95 percent.
Affected transactions include applications with an automated underwriting system response of “approve,” “accept,” “eligible” or “ineligible.”
The changes, which do not impact monthly premium M.I. applications, are effective for single-premium M.I. applications received on or after March 19.
Similar updates were announced earlier this month by Mortgage Guaranty Insurance Corp.
