Lenders now are able to offer simplified and expanded national mortgage underwriting guidelines that allow lower credit scores and eliminate nearly all geographic restrictions using new Simply Underwrite uidelines from Genworth U.S. Mortgage Insurance (USMI), a unit of Genworth Financial, Inc. Genworth USMI’s Simply Underwrite guidelines collapse 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 Desktop Underwriter (DU) or Loan Prospector (LP), the automated underwriting systems (AUS) of the Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac), respectively.
“Simply Underwrite provides expanded guidelines that are easy for customers to understand and use, while maintaining prudent underwriting standards that allow us to appropriately manage risk,” said John Clifford, senior vice president, commercial operations of Genworth USMI.
Simply Underwrite guidelines provide the same pricing, flexibility and ease of use to all Genworth USMI mortgage lender customers, from national mega-lenders to community banks and credit unions. The new guidelines allow loan originators and processors to quickly determine if a loan is eligible for mortgage insurance coverage from Genworth USMI.
Eligible DU “Approve” and LP “Accept” loans that meet the Simply Underwrite eligibility grid can be insured with these simple overlays:
►Minimum borrower contribution of at least three percent from borrower’s own funds;
►Full URAR appraisal or Fannie Mae Form 2055 exterior-only inspection;
►Verbal verification of employment obtained within 30 days prior to loan closing; and
►Condominium/cooperative Unit project approval considerations.
Genworth USMI also now offers one set of guidelines with increased flexibility for lenders who submit non-AUS loans.
The expanded Simply Underwrite guidelines, which allow Fair Isaac and Company (FICO) credit scores as low as 660 for most borrowers purchasing a home with a five percent down payment, will help lenders support the recovering housing market. The expanded guidelines also will remove geographic and property-type restrictions in all markets except for attached housing units in Florida, which still will require Genworth USMI to underwrite to determine eligibility for mortgage insurance coverage. The simplified guidelines also will allow debt-to-income ratios up to 45 percent. The guidelines apply to both retail and third-party originators.
Clifford 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.