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Loan Modification
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CMG MI’s Guidelines for Delinquent Loan Modifications

Key Factors to Consider for a Successful Loan Modification

• The member is employed and has a stable income flow



• Modification plan shows that member has positive cash flow after all monthly payments and income are received

Please note: The decision whether to approve a loan modification is delegated to the Credit Union, but CMG MI must receive the loan modification request for processing in order to keep the policy in force following the modification.

Best Practices

• To reach a sustainable modified payment plan, use "waterfall" decision steps similar to Fannie Mae's: a)verify income and expenses; b) reduce interest rate; c)change amortization; d) re-capitalize arrearage; and e) principal forbearance.



• CMG MI loan modifications may be delinquent, at imminent risk of delinquency, or performing.



• Setting up a trial payment period as a condition of permanent loan modification (similar to Fannie Mae requirement).

Important Information about Your CMG MI Policy Following Loan Modification:

• Re-capitalization of past due payments is allowed. Processing fees, late fees or penalty fees should not be included in re-capitalization plans.



• If the unpaid principal balance (UPB) is increasing due to a re-capitalization, the policy premium and subsequent monthly billing will be based on the new UPB. A subsequent claim will be calculated on the new UPB as well.



• Policy percentage coverage remains the same.



• CMG MI imposes no restriction on loan-to-value or combined loan-to-value at the time of modification.



• Occupancy should be the same as the original insured loan.



• Changing the amortization is part of the decision waterfall. Please be aware that CMG MI does not allow negative amortization.



• Part of the waterfall decision process is principal reduction. In the event of a claim, the principal reduction is not a claimable cost.

For more information, visit our CU HomeKeepers page, call our Field Underwriting Network at (888) 746-6264 or contact your CMG MI Account Executive.

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