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Tougher credit and income requirements become effective today on new mortgage insurance applications submitted to United Guaranty Corp. The new guidelines are even stiffer on third-party originations.
Mortgage insurance applications submitted on or after today require a minimum credit score of 680, according to bulletin CA 2009-27 issued today by the Greensboro, N.C.-based company. Loans with scores below 680 will be ineligible for insurance. Loans originated by third parties will require a minimum credit score of 720. United first announced the changes last month. Also effective today is a maximum debt-to-income ratio requirement of 41 percent on third-party originations and on loans above $417,000. In addition, the 41 percent DTI will apply if the property securing a loan is in a “severely declining market.” The tighter credit-score and DTI requirements apply to loans underwritten with Fannie Mae’s or Freddie Mac’s automated underwriting systems. They also apply to all previously approved lender exceptions. Related: |