Genworth Mortgage Insurance is making changes that promise to make underwriting a simpler process for mortgage originators by eliminating some of its overlays.
The Raleigh, N.C.-based firm is introducing new guidelines for loans that are approved through automated underwriting systems. In addition, guidelines for manually underwritten loans are being expanded.
Mortgages with a Desktop Underwriter “approve/eligible” recommendation or a Loan Prospector “accept-eligible” risk classification are impacted.
“We understand you’re focused on putting more borrowers into homes leaving little time to analyze and compare overlays,” Genworth Announcement 2013-1 stated. “With Simply Underwrite from Genworth US Mortgage Insurance, we now have fewer overlays so you can close more loans and open more doors.”
Genworth said that the changes supersede its approved program exceptions that were previously issued.
Dubbed “Simply Underwrite,” the new guidelines can be used for loans originated through all channels.
The guidelines have fewer overlays than existing programs.
For instance, loan-to-value ratios based on property types have been aligned with Fannie Mae’s and Freddie Mac’s guidelines. Debt-to-income ratio and credit score complexity has been eliminated, as have all overlays except four simple areas to check. Genworth also eliminated all geographic eligibility restrictions.
Even guidelines on loans manually underwritten outside of “Simply Underwrite” have been simplified with the changes noted in the previous paragraph. In addition, delegated underwriting will be allowed on transactions involving construction-to-permanent loans, renovations and expanded acreage properties.
The simplified guidelines take effect on mortgage insurance applications received on or after Jan. 27.
