|
Dear Valued Customer:
PMI continues to support your ability to facilitate sustainable homeownership for qualified borrowers in the
high-LTV market (95.01% and above). We monitor the performance of our products and, as needed, make
changes. Effective October 1, 2007, we are adjusting rates (pending state approvals) and guidelines for our
borrower-paid mortgage insurance to reflect recent and anticipated trends in the mortgage market. The changes are as follows:
New Categories for Standard Rates for Loans with LTVs of 95.01% and Above
New LTV Categories
PMI will be separating the current LTV category of 95.01% and above into two categories:
• LTV 97.01% and above
• LTV 95.01% to 97%
New FICO® Categories
PMI will be separating the current 620+ FICO category for LTVs of 95.01% and above into
two categories:
• FICO score 660 and above
• FICO score 620 to 659
New Rate Changes & Adjustments
Monthly/pmiNU MONTHLYSM & A-Minus loans with LTVs of 95.01% and above
• Please see highlighted changes, including rate adjustments, on attached rate sheets.
A-Minus & Expanded Criteria Rates
• PMI will no longer insure loans with LTVs of 95.01% and above that receive Desktop
Underwriter ® EA II, EA III, Refer with Caution, Refer with Caution Level IV, and Loan
Prospector ® Caution and A-Minus Caution recommendations.
New Guideline Changes for Interest-Only Loans
PMI will no longer insure interest-only loans with LTVs of 97.01% and above.
PMI will insure interest-only loans with LTVs of 95.01% to 97% that are:
• Originated in compliance with a Fannie Mae® or Freddie Mac® product or program, and
• Have a minimum interest-only term of five (5) years, and
• The borrower is qualified at the fully amortizing payment rate.
New Guideline Changes for Borrowers with Nontraditional Credit
PMI will no longer insure loans with LTVs of 97.01% and above for borrowers who have
nontraditional credit.
New Guideline Changes for Loans with LTVs of 95.01% and Above
In this category, PMI will no longer insure loans that have any of the following features:
• FICO score less than 620
• Cooperatives, 3-4 units, or manufactured housing.
Monthly Premium & Rates Notes:
STANDARD
“Standard” loans are defined as having a credit (FICO)
score of at least 620 or comparable credit history.
NOTES:
1] Rates must be selected based upon property location.
30-Year Loans: 26-40 year amortization; ≤ 25-Year
Loans: 0-25 years amortization. The minimum PMI
rate is 10 bps (0.10%), including all discounts
(bps= basis points).
2] Amortized Renewals: The amortized renewal rate is
applied to the outstanding loan balance.
Constant Renewals : The constant renewal rate is
applied to the original loan balance through year 10
and is reduced for years 11 through term as follows:
• Standard Plan: The constant renewal rate for years
11 through term is 0.20% for 30 year loans; for
terms < 25 years with LTVs of 95% & under,
apply 0.125% for fixed rate loans and 0.15% for
other loan types.
3] Where pricing cannot be based on credit (FICO)
scores, an analysis of the borrower’s credit profile is
required to determine the applicable premium rate. For
a copy of PMI’s comparable credit criteria, please contact
your PMI representative.
4] Monthly plan refunds are based on unearned premium.
Annual plan refunds are pro rata.
MORTGAGE TYPES
Fixed-payment: Fixed-payment mortgages feature level
payments for the first five years of the mortgage. All
acceptable plans must [1] have the initial payment rate
equal to or greater than the initial accrual rate, [2] have no
temporary buydowns, negative amortization, rate concessions,
balloon mortgages with terms of less than five
years, or instruments with graduated payment features.
Included in this category are 5/1 and 7/1 ARMs.
Temporary Buydowns and ARMs with annual caps of
1% or less feature payment changes, or the potential for
payment changes during the first five years of the mortgage.
Included are fixed-rate loans with 1% annual temporary
buydowns, 3/1 ARMs; 1-year or 6-month ARMs with
1% or less annual effective interest rate caps; blended
ARM/fixed-rate instrument; and 3-year ARMs that have an
interest rate adjustment of 2% or less. Loans featuring
scheduled negative amortization are not eligible.
ARMs with annual caps greater than 1% feature
payment changes, or the potential for payment changes
during the first five years of the mortgage. Included are
adjustable rate mortgages, balloons with a term of less
than five years, rate concessions and buydowns. Loans
featuring scheduled negative amortization are not eligible.
A-Minus & Expanded Criteria Rates Notes:
A-MINUS
Refer to PMI’s A-Minus Program Guideline Summary for
loan eligibility.
EXPANDED CRITERIA
Apply to 620+ with the following: Fannie Mae’s Desktop
Underwriter ® (DU®) Expanded Approval® (EA) I, EA II,
EA III, Refer w/Caution, Refer w/Caution Level IV, Freddie
Mac’s Loan Prospector ® (LP) Caution, LP A-Minus Caution.
NOTES:
1] Rates must be selected based upon property location.
30-Year Loans: 26-40 year amortization. The minimum
PMI rate is 10 bps (0.10%), including all discounts
(bps= basis points).
2] Amortized Renewals: The amortized renewal rate is
applied to the outstanding loan balance.
Constant Renewals : The constant renewal rate is
applied to the original loan balance through year 10
and is reduced for years 11 through term as follows:
The constant renewal rate for years 11 through term
is .20% for all loans.
3] Where pricing cannot be based on credit (FICO)
scores, an analysis of the borrower’s credit profile is
required to determine the applicable premium rate. For
a copy of PMI’s comparable credit criteria, please
contact your PMI Account Manager.
4] Monthly plan refunds are based on unearned
premium. Annual plan refunds are pro rata.
MORTGAGE TYPES
Fixed-payment: Fixed-payment mortgages feature level
payments for the first five years of the mortgage. All
acceptable plans must [1] have the initial payment rate
equal to or greater than the initial accrual rate, [2] have no
temporary buydowns, negative amortization, rate
concessions, balloon mortgages with terms of less than
five years, or instruments with graduated payment
features. Included in this category are 5/1 and 7/1 ARMs.
Temporary Buydowns and ARMs with annual caps of
1% or less feature payment changes, or the potential for
payment changes during the first five years of the
mortgage. Included are fixed-rate loans with 1% annual
temporary buydowns, 3/1 ARMs; 1-year or 6-month ARMs
with 1% or less annual effective interest rate caps;
blended ARM/fixed-rate instrument; and 3-year ARMs that
have an interest rate adjustment of 2% or less. Loans
featuring scheduled negative amortization are not eligible.
ARMs with annual caps greater than 1% feature
payment changes, or the potential for payment changes
during the first five years of the mortgage. Included are
adjustable rate mortgages, balloons with a term of less
than five years, rate concessions and buydowns. Loans
featuring scheduled negative amortization are not eligible.
***
|
