Mortgage Insurance Is Back!

Mortgage Insurers Have Re-entered the Market

According to a letter from mortgage insurer Genworth Financial to lenders, the firm is loosening its underwriting guidelines starting April 12th.

As the mortgage market continues to stabilize, Genworth's strong reliance on prudent underwriting standards
and processes will allow us to continue expanding our underwriting guidelines. We are introducing new
definitions for Retail and Non-Retail Originations. These new definitions will allow us to broaden our
guidelines in all markets, including Arizona, California, Florida, Michigan, and Nevada. Our goal is to work
with you, our lender partners, to prudently insure more loans for qualified borrowers and expand
home ownership opportunities throughout the nation.

Nevada, Cali, Florida, Michigan, Arizona.....Not Longer Off Limits

No state is a no-go zone for MI any more. This really is cause for celebration: borrowers in these states will access to the same current mortgage rates as everyone else, and access to financing should help boost real���� estate sales. Here are the highlights:

• Declining and distressed real estate markets (almost no one can get insurance in those places) policies will be abolished.
• Condominiums will be insurable to a 95% loan-to-value (LTV).
• Coops will be insurable to 95%.
• Two unit properties (duplexes) will now insurable to 90%. LTVs
• Manufactured housing (mobile homes) will be insurable to an LTV of 85%.

Credit Underwriting Guidelines Relaxed Too

Minimum credit scores to secure mortgage insurance (MI) have been lowered from 720 or 740. Applicants with at least three trade lines for a period of at least twelve months can qualify with these scores:

• 680 for a 95% loan on a primary residence (purchase or rate and term mortgage refinance),
• 740 for a 90% loan on a primary residence with a loan exceeding $417,000
• 700 for a cash-out refinance of up to 85% (many MI companies refused to insure cash-out refinances at all before now),
• 680 for a 95% mortgage on a condominium (off-limits until now for many insurers),
• 680 for a 90% mortgage on a duplex,
• 680 for an 85% manufactured housing loan, and
• 720 for a purchase or rate and term mortgage refinance on a second home.

Extra Benefits of Mortgage Insurance

Many mortgage insurers have added value to their products. Applicants may qualify for a discount if they take eight hours of home buyer classes. They may qualify for job loss protection at no extra charge from some mortgage insurers. Mortgage insurance companies also actively work with borrowers and lenders to help homeowners experiencing financial difficulties. It is in their best interest to help homeowners avoid foreclosure and they have a lot of clout with lenders.