The company said the change collapses several current sets of underwriting guidelines, based on institution type, origination channel and other factors, into one expanded national underwriting standard for loans approved by Fannie Mae’s Desktop Underwriter or Freddie Mac’s Loan Prospector. Over a year-and-a-half ago, Radian came out with its iteration of this product, while more recently, MGIC rolled it out.
For those who are submitting manually underwritten loans for insurance approval, Genworth said it is offering one set of guidelines with increased flexibility to these clients.
While the overlays for approval include a minimum 3% contribution from the borrower’s own funds, Genworth added that only on 95% loan-to-value ratio mortgages will it consider credit scores as low as 660. But the debt-to-income ratio can be as high as 45%.
Attached housing units in Florida still must be submitted to Genworth MI for underwriting.
John Clifford, senior vice president, commercial operations, said Genworth USMI will closely monitor the performance of loans under the new guidelines, but noted that loans from customer segments already using similar expanded guidelines have a history of good performance.