MGIC will stop insuring properties that were recently purchased. The mortgage insurer has also updated its premiums and its restricted markets.
Loans are ineligible for insurance if the seller acquired the property during the past 90 days, according to MGIC Bulletin #08-2209 issued yesterday. Properties purchased within 180 days will require a manual MGIC underwriting.
But the restriction doesn’t apply if the seller is a lender that acquired the property through foreclosure. Properties acquired through divorce, corporate relocation or estate administration are also exempt.
The revision is effective on Oct. 12.
Also as of next month, borrowers seeking loans higher than $417,000 in tier-two restricted markets will need a minimum FICO score of 760.
The Milwaukee-based firm said that it will only insure rate-term refinances in tier-two markets if it already holds a policy on the loan being refinanced. In addition, the maximum loan-to-value on condominiums has been limited to 85 percent — though it won’t insure Florida condominium-secured mortgages in “tier two” markets.
Premium rates have been changed in all markets where the loan is 90 percent LTV with 17 and 25 percent coverage, and for 85 percent LTV with 12 percent coverage. (view revised rates) The new rates are effective Oct. 12 and subject to regulatory approvals.
MGIC also said that it reclassified some markets in Alabama, Colorado, Illinois, Kentucky, Missouri, New Hampshire and Ohio from tier-one restricted to standard markets. (view specific markets) In addition, the Detroit and Chicago areas were moved from tier-two to tier-one.
The updates to the markets are effective on Sept. 21.
