Changes to the Distressed Markets Policy and List - Effective 12/15/2008

Effective December 15, 2008, CMG Mortgage Insurance Company (CMG MI) will be making changes to our Distressed Markets Policy in response to developments in the overall mortgage market.

The following documents will be effective December 15, 2008:

• Distressed Markets Policy
• Distressed Markets List

Please note the following:

• Changes supersede previously issued CMG MI approved program variations
• Changes apply regardless of submission channel to CMG MI
• Changes apply regardless of any Automated Underwriting System (AUS) recommendation or decision

Changes to Distressed Markets Policy:

• The following states will be added to our distressed markets list:
  • Arizona
  • Nevada



• The following state will have a maximum 90.0% LTV/CLTV:
  • California



• The following states will be subject to two (2) LTV/CLTV tiers on our distressed markets list:
  • Florida and Nevada:
    Maximum 95.0% LTV/CLTV or 90.0% LTV/CLTV as identified by MSA/MSADs, or non-MSA areas. Please view CMG MI's 12/15/08 Distressed Markets List for further details.



• The following MSA will be removed from our distressed markets list:
  • Barnstable Town, MA



• Ineligible for Mortgage Insurance
  • Construction-To-Perm
  • Interest Only
  • 3-4 Unit Properties



• LTV/Loan Amount
  • Less than or equal to 90.0% LTV/CLTV to $417,000
    • Minimum 620 loan representative credit score
  • 90.01 – 95.0% LTV/CLTV to $417,000
    • Minimum 680 loan representative credit score
  • Less than or equal to 90.0% LTV/CLTV - $417,001-$700,000
    • Minimum 720 loan representative credit score
  • 90.01 - 95.0% LTV/CLTV - $417,001-$600,000
    • Minimum 740 loan representative credit score



• Second Homes
  • Maximum $417,000 loan amount
  • Minimum 720 loan representative credit score
  • Ineligible: AZ, CA, FL, & NV



• Condominiums
  • 90.0% LTV/CLTV to $417,000
    • Minimum 680 loan representative credit score
  • 90.0% LTV/CLTV to $650,000
    • Minimum 720 loan representative credit score



• 2-Unit Properties
  • Maximum $533,850 loan amount



• Manufactured Homes
  • Minimum 680 loan representative credit score



• Debt Ratios
  • Maximum 45%

To determine if a property is subject to the CMG MI Distressed Markets Policy, please visit the CMG MI ZipMap at http://www.cmgmi.com/map. Additional information regarding the CMG MI Distressed Markets Policy is available at: www.cmgmi.com/distressed_markets .

Please make any necessary updates to your internal systems. CMG MI recommends that you notify your staff and branches of the changes and the effective date as soon as possible.