Mortgage tech firm Staircase has launched a tool that gives private mortgage insurers the ability to automate the underwriting of non-delegated mortgage insurance (MI) policies for lenders.
In the delegated channel, the lender underwrites the loan for MI and then submits it to the mortgage insurer. With non-delegated MI, lenders typically submit a full package of information from the borrower—including pay stubs and tax returns—to the insurer, which then processes the information manually to make an underwriting decision according to its guidelines.
For lenders, non-delegated MI underwriting often provides rescission relief for eligible loans. But it takes longer—anywhere from two to eight hours—for an insurer to underwrite a loan policy.
Staircase says its MI Underwriting tool fully automates the non-delegated underwriting process by pulling documents and data directly from lenders to allow insurers to make instant policy decisions.
It includes manual quality control where needed but also enables mortgage insurers to route exceptions to their existing internal processes.
The result is mortgage insurers can become 100% fully non-delegated which provides them with higher margins than delegated underwriting, the company claims.
“Our MI Underwriting product empowers mortgage insurers to produce non-delegated MI policies faster, more accurately, and less expensively so they are able to achieve higher margins,” says Adam Kalamchi, co-founder and CEO of Staircase, in a release. “Just as importantly, MI Underwriting delivers instant mortgage insurance decisions that can help insurers grow market share while allowing their lending partners to increase closing rates. It’s a total game changer for the MI industry.”