At least one mortgage insurer is tracking the performance of third-party originators and denying coverage on loans originated by some of them. Another has made several updates tied to declining markets, while a third insurer is improving its contract underwriting operations.
In Bulletin #07-2009, MGIC said third-party originator data is now required on mortgage insurance applications — enabling the company to screen originators for eligibility. MGIC noted that it will notify originators when it will no longer insure their originations.
United Guaranty Residential Insurance Co. said Friday in Bulletin CA 2009-37 that home-equity lines-of-credit must be frozen on all transactions with subordinated second liens — regardless of whether the property is in a declining market and regardless of the combined loan-to-value. Second liens cannot have any 30-day late payments during the past 12 months. Cashout is only allowed if proceeds are being used to pay down the second lien, while cash back to the borrower is limited to 2 percent, up to $2,000.
Greensboro, N.C.-based United added Anderson and Kokomo, Ind.; Fayetteville, N.C.; and Kingsport-Bristol-Bristol, Tenn.-Va., to its declining markets list. The additions are effective tomorrow.
In Bulletin CA 2009-30, United noted that it has made improvements to it mortgage insurance quote calculator, Rate Runner. The calculator instantly advises users if loans exceed guidelines or don’t meet eligibility criteria. Quotes are edited to reflect declining markets.
United recently noted that its origination systems automatically reflect changes to declining markets, though customers are notified by e-mail.
Lender-paid primary mortgage insurance is now eligible for DU Refi Plus, Fannie Mae said in Selling Guide Announcement 09-20 last month.
A partnership between Radian Guaranty Inc. and Prommis Solutions enabled the mortgage insurer during May to reach out to more than 4,600 borrowers at risk of foreclosure, a press release last month said. Thousands of foreclosures are expected to be prevented by the partnership over the next several years through a combination of loan modifications and forbearance plans.
Prommis reportedly improves communication with borrowers through mailings, outbound phone calls and “diligent follow-up efforts.”
In a July 7 statement, Radian praised the loan-to-value expansion on the Home Affordable Refinance Program to 125 percent from 105 percent. Radian outlined a number of steps it has taken to reduce foreclosures including a partial claim for some modified loans and partnering with third-party credit counseling services.
A new system was developed by LenderLive Network Inc. for Radian’s national network of contract underwriters, a news release today said. The system will enable Radian to consolidate and streamline its underwriting and improve efficiency in a fluctuating market. It also simplifies input for underwriters.
Customers reportedly can utilize Radian’s contract underwriting for pre-purchase conditional approvals or for the entire origination and closing process.
