Mortgage Insurance

sagarthakar · Joined: 15 May 2007 Posts: 68 26.01 Dollars($)

Hello,

Is it possible for anyone to provide me all available information regarding mortgage insurance, what I am interested is that we know tht generally MI is mandatory when LTV > 80 %.

The questions which I am interested is as follows :

1.) Do MI Companies Underwrite Loans on behalf of Lenders? If they do why
is it so.?

2.) MI Companies have their own U/W Guidelines how does these guidelines
affect a borrowers loan, I mean a lender has his own set of guidelines,
then how come MI Companies U/Ws play a role in this.

I can think of these two points as of now, but would really like to know how do these MI Companies operate.

Please may I request to please come forward and help me as you always have.

Thank You

Regards

Sagar

John1 · Posted: Tue Mar 18, 2008 2:08 pm Post subject:

MI (whether it paid by the borrower or lender) is mandatory for all loans greater than a 80% ltv that are sold to the secondary market (Fannie & Freddie)

1.) MI companies can Underwrite loan for most lenders. They follow the Fannie or Freddie guidelines. The reason Brokers submit loan to MI companies to underwrite is usually for speed. MI co, usually takes 2-3 day for initial underwriting, the lender may take up 2-14 days depending on the volume. Personally I don't like MI Co. underwirting because they put some many more condition than the lender. They probably do this to cover their back side.
2.) Lenders guidelines can vary, but if the MI Co. is not will to take the risk and Underwirte the file then it really doens't matter what the guidelines say for the lender. EX. A lender can offer one loan for 100% financing, but it the MI Co. will only underwrite loan with a ltv of 97% (3% down payment) then the loan is dead because the lender requires MI on the loan.

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