IMPORTANT CHANGES: Mortgage Insurance and Credit Requirements

This is from one of our major lenders:

Policy Changes Impacting Mortgage Insurance Requirements
Mortgage insurance companies continue to make significant changes in their requirements and pricing; therefore, the following changes are effective with registrations and/or locks on and after May 23, 2008. All loans must fund/close by June 30, 2008. NO EXCEPTIONS FOR ANY REASON ALLOWED!

Conventional Loans
§ Loan Score & LTV requirements
o Minimum 620 allowed with LTV's greater than 80% up to and equal to 95

§ Cash-out refinances with Loan Scores of 679 or lower
o NOT allowed with LTV’s greater than 80%

§ Cash-out refinances with conforming investment properties
o NOT allowed with LTV’s greater than 80%

§ Cash-out refinance on second homes
o NOT allowed with LTV’s greater than 80%

§ Conforming investment properties with Loan Scores of 679 or lower
o NOT allowed with Loan Scores of 679 or lower

§ 3-4 unit properties
o NOT allowed with LTV’s greater than 80

§ All At Risk Market policy reductions continue to apply
o 90/90% LTV/CLTV for purchases (primary residence or second home)
o 80/90% LTV/CLTV for all investment property transactions
o 80/90% LTV/CLTV for all cash-out refinances transactions
o 80/90% LTV/CLTV for all loans with the Interest-Only payment feature

Changes to Home Opportunities, MyCommunityMortgage®, Alt 97, Flex 97, Home Possible and Easy-to-Own Remittance Mortgage programs

§ Loan Score and LTV requirements
o 680 required for LTV’s between 95.01% and 97%

§ If a Home Opportunities loan is at 97% and is in a market classification 2,
o Then the LTV would need to be dropped to 90%.

§ Homebuyer Education class for first-time homebuyers
o Required for all first-time homebuyers on the loan application

§ Other secondary financing
o NOT allowed unless an approved DAP

The fine print (in Big Letters)
§ Pipeline loans must be locked by 6 p.m. Pacific Time on May 22, 2008.
§ Loans must fund & close by June 30. NO Exceptions will be allowed.
§ The changes above impact lender-paid and borrower-paid mortgage insurance (LPMI and BPMI ) for all conventional conforming and non-conforming loans with LTV’s greater than 80%
§ The changes below DO NOT impact loans with LTV’s less than or equal to 80%
§ The changes below DO NOT include Government loans