PMI Expands Refi-To-Mod Program

rtgage Insurance Co. has developed an expanded Refinance-to-Modification (RTM) program that can be used with all PMI-insured loans, not just Home Affordable Refinance Program (HARP)-eligible loans owned or loans guaranteed by either Fannie Mae or Freddie Mac. Under the program, the PMI coverage percentage and premium rate remain the same, and the existing insurance certificate is modified to cover the new refinanced loan. To minimize borrower expenses associated with this process, PMI is also not charging fees to modify the existing insurance certificate for either the New Lender/Servicer or Same Lender/Servicers programs. PMI's modification of the existing insurance allows coverage to be extended to the new refinanced loan, even though the property value may be lower than when the original loan was insured and may not be eligible for mortgage insurance coverage. In addition, allowing modification of the insurance on a borrower's loan, regardless of investor or servicer, represents a consolidated approach to facilitate refinances for more homeowners, PMI says. To be eligible, the borrower must be current on his or her existing loan, and the new loan should improve the borrower's financial position by at least one of the following: a reduction in the mortgage payment, interest rate or principal balance; an extension of the adjustable-rate mortgage fixed-payment period; an extension of the loan or amortization term; or a more stable payment product. Borrowers will need to work closely with their servicers to ensure they meet required qualifications, and the lenders/servicers must meet program eligibility requirements. Additional requirements may apply depending on whether the existing or new lender/servicer is requesting the coverage modification. "PMI is working closely with mortgage servicers and the GSEs to keep borrowers in their homes, supporting numerous housing and foreclosure prevention initiatives," says Chris Hovey, PMI's vice president of servicing operations. "Providing consistent solutions across all of our insured loans helps investors accelerate refinancing to lower monthly payments – or otherwise improve the position – of all borrowers who have PMI insured loans." PMI has also implemented other initiatives to support borrowers, lenders and servicers in their efforts to avoid unnecessary foreclosures. These initiatives include a new Web site section, "Home to Stay," which provides lenders, servicers and homeowners information on recent support initiatives, such as the Treasury's Making Home Affordable program, and a nationwide radio public service announcement. SOUR


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