Genworth Mortgage Insurance, a subsidiary of Genworth Financial, announced on Tuesday that it will reduce its rates across all loan-to-value ratios for borrowers with credit scores of 740 and higher in order to better align with the industry.
The private mortgage insurer said it standardized and simplified its Borrower Paid Mortgage Insurance premium structure, resulting in weighted-average rates that are consistent with its existing card given the current mix of business.
Genworth’s new pricing takes effect April 4, 2016.
This move comes during a heightened time of competitiveness between PMIs and the Federal Housing Administration.
“We were very thoughtful with our new pricing approach so as to not considerably disrupt the amount of loans insured by our business versus the FHA. Our goal today is, and always has been, to encourage the use of private capital and ensure balance in the government’s role in the housing market,” said Rohit Gupta, president and CEO.
“As we looked at the entire environment and our competitiveness with FHA, we knew it was time to realign our prices,” Gupta said in an interview with HousingWire.
Gupta explained that the company realigned its structure for three main reasons:
- The new GSE capital criteria that went into effect this January
- To meet the needs of lenders in terms of transparency and granular pricing that they can use every day
- To compete on pricing
Previously, Genworth was pricing into four FICO buckets, but with the new changes, it decided to expand that into eight FICO buckets, which gives loan officers and consumers more competitive rates.
As a result of the announcement, Gupta said, “We’re able to provide greater granularity on our pricing while at the same time generate returns that are expected to be in the low to mid-teens in aggregate and to align with the risk-based capital requirements under the Government Sponsored Enterprises’ Private Mortgage Insurer Eligibility Requirements.”