May 8, 2013
Performance Premium Full-File and RAP Underwriting Requirement Changes and Clarifications - Effective May 13, 2013
As part of our ongoing risk management analysis, United Guaranty is changing and/or clarifying the following Performance Premium® Full-File and RAP® underwriting requirements effective May 13, 2013.
Performance Premium Full-File
The following changes have been made to the Performance Premium Full-File Underwriting Requirements guide:
- Removed all reference to GQX®.
- Removed Desktop Underwriter® (DU®) Refer with Caution/IV from the DU and LP Recommendations section because it is no longer a valid DU recommendation.
- Ineligibility Matrix:
- Removed three- to four-unit properties and investment properties with less than six months' reserves as ineligible. Loans with less than the required reserves for investment properties and three to four units will be reviewed on a loan-by-loan basis.
- Removed a borrower who has more than two loans insured with United Guaranty as ineligible. A borrower who has more than two loans insured with United Guaranty will be reviewed on a loan-by-loan basis.
- Changed the appraisal information within the Ineligibility Matrix. We removed all the individual appraisal types and valuation methods that were ineligible and the section now reads “Any valuation method other than a full Uniform Residential Appraisal Report (URAR), with interior and exterior inspection” is ineligible.
Performance Premium RAP
The following changes have been made to the Performance Premium RAP Underwriting Requirements Guide:
|Section||Underwriting Requirement Change or Clarification|
|2.02.01: Unacceptable DU and LP Recommendations||
|3: Ineligibility Matrix||
|4.04: Additional Documentation Requirements for Agency AUS Underwritten Loans||
|6.01.01: Loan Amounts $417,001– $625,500||
|6.01: Jumbo Loans $625,501–$850,000||
|6.02: Housing Finance Agency (HFA) Loans Using Expanded Requirements||
|7.03: Balloon Mortgages||
|8.01.02: Buy-Out Refinance||
|8.01.03: Fannie Mae's DU Refi Plus, and Refi Plus, and Freddie Mac's Relief Refinance||
|8.03.01 to 8.03.05: Construction-to-Permanent Loans||
|11.01.02 and 11.01.03: Borrower's Own Funds - Acceptable Sources and Unacceptable Sources||
|11.03.09: Disaster Relief Grant or Loan||
|12.01.01: Valid Credit Scores||
|12.01.02 : Minimum Number of Credit Scores; and 12.01.03: Borrower Representative Credit Score||
|12.04.03: Short Refinance||
|12.05.02: Authorized User Accounts||
|12.05.02: Debts Paid by Business||
|14.03.01: Ineligible Condominiums||
|14.04.01: Ineligible Cooperatives||
|14.07: Mixed-Use Properties||
A lender must already have an agreement in place with United Guaranty to use RAP.
HARP Loan Modifications - Annual Renewal Premium Calculation Clarification
(see previous update, September 11, 2012)
United Guaranty has clarified its policy for Annual Renewal Premium calculations for HARP.
A HARP modification creates a new, original insured loan amount, so our Annual Renewal Premium schedule restarts with the new closing date. This eliminates the need for you to calculate the time remaining until the Year-10 premium rate change goes into effect. If a loan being modified is already in the 11th year, the annual renewal premium will remain at that rate for the remainder of the term.
To illustrate both outcomes:
- The premium schedule restarts if the coverage has not entered the 11th year:
- United Guaranty receives a HARP refinancing request with a closing date of May 1, 2013. The origination date is July 11, 2005, and the original rate is .76 with a Year-10 renewal rate of .20.
- The HARP modification will have an endorsement date of May 1, 2013. The rate will remain .76, but - because the loan is only eight years old - the renewal premium schedule will reset to remain in effect for 10 years from May 1, 2013.
- In the 11th year, the rate will adjust to .20.
- The premium schedule remains the same if the coverage is already in or beyond the 11th year:
- United Guaranty receives a HARP refinancing request with a closing date of May 1, 2013. The origination date is July 11, 2001, with a Year-10 renewal rate of .20.
- When the HARP modification is processed, it will have an endorsement date of May 1, 2013.
- The rate will not reset, but will remain .20 for the remainder of the term.
For more information on HARP annual renewal premiums, please visit this page. If you have questions or need further assistance, please contact our Customer Quality Center at 888.822.5584, Option 1.
Please contact your United Guaranty Account Representative if you have any questions concerning this announcement.