PMI Ups LTVs, Adds Mortgage Products to Insurance Plans
PMI Group (PMI) expanded its eligibility and underwriting guidelines for a number of loan products it insures, in many cases increasing maximum loan to value (LTV) thresholds. Condominium mortgages can now by insured in non-distressed markets to a maximum 95% LTV. Previously, the maximum LTV was 90%. This new limit does not apply to attached housing in Florida. In distressed markets, the LTV maximum is 90%, up from 85%. The changes come as part of an ongoing review process or eligibility and standards, A PMI Group spokesperson told HousingWire. High-balance loans can now be insured in distressed markets to a maximum 90% LTV with a 740 credit score. Previously, the LTV was 85%. For non-distressed markets, high-balance loans can be insured with a credit score of 700. The score minimum was previously 740. A number of loan products the companies previously insured, but pulled from eligibility are once again eligible for insurance include cash-out refinance loans, second home loans, construction-to-permanent loans and high-balance loans. Cash-out refinance loans can be originated in non-distressed markets to a maximum 85% LTV with a 720 credit score, PMI said. Second homes are eligible in non-distressed markets to a maximum 90% LTV with a 720 credit score. Construction to permanent loans, used to fund the construction of a home and paid off while the owner occupies it, are eligible in non-distressed markets with a maximum 95% LTV with a principal limit of $417,000 for borrowers with a 680 credit score, and 90% LTV to $625,500 with a 700 credit score. High-balance loans for properties in a number of states hit hardest by the housing downturn, including Arizona, California, Florida, Hawaii, Maryland, Michigan, Nevada and Rhode Island are now eligible at a maximum 85% LTV with a 740 borrower credit score. The company also announced clarified and enhanced underwriting guidelines that take effect January 1, 2010, but the company said its encouraging customers to implement them immediately. These guidelines range from allowing borrowers to use a credit card to pay closing costs outside of escrow to a 90-day ownership requirement and a requirement that borrowers complete credit counseling and establish a minimum of three current, active and open credit accounts with a minimum 12-month history and no late payments. PMI Group generally relies on guidelines set by the government-sponsored enterprises, but when the two entities have differing rules, or when PMI Group wants to clarify a regulation, it will occasionally issue or amend guidelines, the spokesperson said. Write to Austin Kilgore.