Margins are compressed across the mortgage finance industry, and lenders are looking for solutions that help them win business in this competitive market. We interviewed Carl Tyree, executive vice president and chief sales officer at Arch MI, to find out how Arch MI’s RateStar Buydown is making a difference for its lender clients.

HousingWire: What prompted Arch MI to create RateStar Buydown?

Carl TyreeCarl Tyree: Without a doubt, the biggest challenge for our clients is margins. Mortgage originators are operating as efficiently as they can, but with margins and volumes declining, it will be difficult for some lenders to meet their financial targets.

Competitive pressure is one reason that mortgage insurance (MI) is now at the forefront of so many transactions — it can truly make a difference for the borrower.

Arch MI created this unique new tool that’s similar to a rate buydown and allows you to customize your borrower’s MI premium to an exact dollar amount.

HW: How does RateStar Buydown work?

CT: We took RateStar — our very popular risk-based pricing solution— and gave it even more flexibility with a new feature that enables lenders to use seller incentives, lender credits and borrower funds to buy down their borrower’s MI premium to an exact dollar amount.

As a dynamic pricing solution, RateStar provides competitive MI rates that are tailored to individual buyers based on a variety of loan characteristics.

Using RateStar Buydown, lenders can now create the perfect combination of upfront and monthly payments for individual borrowers. Lowering the premium payments means more loans can meet DTI requirements — making the lender more competitive. Overall, RateStar Buydown offers something the competition can’t beat: a loan solution tailored to each borrower’s needs.

HW: What reaction have you gotten from lenders?

CT: What we’ve been hearing the most is that Arch MI couldn’t have picked a better time to introduce RateStar Buydown. Both margins and volume have been declining, so every loan that qualifies is more important than ever. With RateStar Buydown, lenders have a tool that can help them avoid losing those qualifying loans to a competitor.

HW: What drives Arch MI to continue to innovate with MI product offerings?

CT: At Arch MI, we’re deeply committed to innovation that increases origination opportunities for lenders. We’re the industry’s risk-based pricing leader with RateStar, which goes well beyond traditional rate sheets by evaluating a variety of loan characteristics to provide the most tailored, complete and precise MI rate.

RateStar’s advanced design delivers an MI quote in seconds anywhere, including using our mobile app. We’re integrated with most LOS and pricing engines, and we back up our commitment to technology with superior support and service that we call Arch MI’s people power.

We recently introduced ASK Arch MI, a time-saving service that gives originators answers to their toughest MI underwriting questions in an hour or less – at no additional cost.

With these advanced products, lenders can close more loans and get more referrals, and that’s what is going to drive their business and ours over the long term.

HW: How does it help lenders qualify more borrowers under GSE loan requirements?

CT: First, using RateStar Buydown for lower premium payments may allow more loans to meet GSE requirements, including Fannie Mae DTI ratios and Freddie Mac AUS approvals. In addition, premiums can be lowered by ensuring that any seller incentives or lender credits are used up front and no money is left on the table.