MGIC (MTG) made several changes to its underwriting guidelines in an effort to streamline the mortgage insurance (MI) application process. The new MGIC Go! Guidelines apply to both primary residences and second home loans that receive and are processed according to DU Approve/Eligible or LP Accept/Eligible response and require three overlays.
Prior to the changes, MGIC had a couple of FICO overlays. An LTV of 97% required a 680 or higher FICO; and those with an LTV of 95% or below required a minimum credit score of 660. After the changes, there is now a maximum LTV/CLTV of 97%/105% and a minimum credit score of 620 and maximum cash out of $150,000.
Previously, MGIC had separate overlays for primary residences vs. second homes; now they are the same.
Additional overlays used to be required if a person was using gift funds or had a DTI of 41% or lower. Now the company allows the LO to follow their Findings/Feedback for source of funds and borrowers own fund requirements.
With other criteria such as DTI, reserves and tradelines, a lender needs to merely follow their findings.
In an email to HousingWire, MGIC noted that these updates are a part of the changes MGIC has made or is making in an attempt to make things easier for lenders.
“We have integrated with many LOS and Product Pricing engines. We launched our Gold Cert coverage, which provides improved MI Coverage starting Day 1. So with the combination of Gold Cert and Go, I believe we offer the best MI option available,” the email stated.
MGIC Vice President of Marketing Sal Miosi told HousingWire in an interview that the GSEs have made a lot of changes to their engines. Their pricing and our own pricing motivates higher quality loans to go conforming.
“We feel how things look right now, we can accept DULP eligible with very modest edits,” he said. “We feel that’s prudent.”
“We’re going to monitor our mix and make sure we’re not missing anything,” said Miosi, who noted that additional changes are not out of the question, even though MGIC feels good where things are now.
“We’re in a real good spot. You don’t know what change is going to happen in the future,” he said.