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PMI expands Refinance-to-Modification program
Jun 25, 2009

PMI Mortgage Insurance Corporation has announced an expanded Refinance-to-Modification (RTM) program that can be used with all PMI-insured loans, not just Home Affordable Refinance Program (HARP) eligible loans owned or guaranteed by either Fannie Mae or Freddie Mac. Under the program, the PMI coverage percentage and premium rate remain the same and the existing insurance certificate is modified to cover the new refinanced loan. To minimize borrower expenses associated with this process, PMI is also not charging fees to modify the existing insurance certificate for either the New Lender/Servicer or Same Lender/Servicers Programs. PMI's modification of the existing insurance allows coverage to be extended to the new refinanced loan--even though the property value may be lower than when the original loan was insured and may not be eligible for mortgage insurance coverage today. In addition, allowing modification of the insurance on a borrower's loan, regardless of investor or servicer, represents a truly consolidated approach to facilitate refinances for more homeowners caught in the housing crisis. To be eligible, the borrower must be current on their existing loan and the new loan should improve the borrower's financial position by at least one of the following: a reduction in the mortgage payment, interest rate or principal balance; an extension of the ARM fixed-payment period; an extension of the loan or amortization term; or a more stable payment product. Borrowers will need to work closely with their servicers to ensure they meet required qualifications and the Lenders/Servicers must meet program eligibility requirements. Additional requirements may apply depending on whether the existing or new lender/servicer is requesting the coverage modification. "PMI is working closely with mortgage servicers and the GSEs to keep borrowers in their homes supporting numerous housing and foreclosure prevention initiatives. Providing consistent solutions across all of our insured loans helps investors accelerate refinancing to lower monthly payments, or otherwise improve the position, of all borrowers who have PMI insured loans," said Chris Hovey, PMI's vice president of servicing operations. PMI has also implemented other initiatives to support borrowers, lenders and servicers in their efforts to avoid unnecessary foreclosures. These initiatives include a new Web site section "Home to Stay," providing lenders, servicers and homeowners useful information on recent support initiatives, such as Treasury's Home Affordable (HARP and HAMP) programs and, a nationwide radio public service announcement - providing solutions to foreclosure and directing borrowers to HUD-qualified resources for help, as well as a range of other programs targeted to keeping families in their homes. For more information, visit
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