CMG MI Program Guideline Changes for All Programs – Effective 5/7/10

Effective May 7, 2010, CMG Mortgage Insurance Company (CMG MI) is making changes to our Conforming & Non-Conforming Program Guidelines and to our Construction-to-Perm Program Guidelines.

Please click here to see our complete Conforming & Non-Conforming Program Guidelines, effective 5/7/10.

Please click here to see the updated guidelines on insuring Construction-to-Perm loans.

Please review Credit Risk Bulletin #4-10 for more details of the 5/7/10 changes.

Please read our Guidelines Comparison for additional information on the 5/7/10 changes.

The following should be noted:

• 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

Click here to watch our video on the May 7 changes!

Changes to CMG MI’s Conforming & Non-Conforming Program Guidelines, Effective 5/7/10

• Credit History – Further clarification regarding the evaluation of 3 open and active trade lines
• Although a credit score can be generated with one trade line, CMG MI does not consider the credit score valid unless at least three open and active trade lines are evaluated for a minimum of 12 months. The validity of the credit score and the number of trade lines is of importance if the credit history is “thin” or limited. Thin credit refers to a file of credit information that contains very little data about the borrower’s use of credit, most likely because there isn’t a long history of credit use upon which to judge repayment ability. The valid credit score policy does not apply to all borrowers. Borrowers who have a lengthy and in-depth credit history (multiple years and multiple active, inactive and closed accounts) do not have a credit score validity issue, and are not required to have three open and active accounts to qualify, although the minimum loan representative credit scores specified in these guidelines nonetheless apply

Changes to Construction-To-Permanent Guidelines, Effective 5/7/10

• Loan Type – Remove purchase only requirement for Short Term ARMs, thus Short Term ARMs are eligible for both Construction-Purchase and Construction-Refinance transactions
• Short Term ARMs (1 to 3 years fixed period)
• Ineligible: Short Term ARMs less than 1 year fixed period, Loan Amounts > $417,000
• Credit History – Further clarification regarding the evaluation of 3 open and active trade lines
• Although a credit score can be generated with one trade line, CMG MI does not consider the credit score valid unless at least three open and active trade lines are evaluated for a minimum of 12 months. The validity of the credit score and the number of trade lines is of importance if the credit history is “thin” or limited. Thin credit refers to a file of credit information that contains very little data about the borrower’s use of credit, most likely because there isn’t a long history of credit use upon which to judge repayment ability. The valid credit score policy does not apply to all borrowers. Borrowers who have a lengthy and in-depth credit history (multiple years and multiple active, inactive and closed accounts) do not have a credit score validity issue, and are not required to have three open and active accounts to qualify, although the minimum loan representative credit scores specified in these guidelines nonetheless apply

Please make any necessary changes to your systems and notify your staff and branches as soon as possible. Questions? Please contact your CMG MI Account Executive.