Genworth Financial Inc.'s U.S. mortgage-insurance unit will reduce pricing and expand underwriting guidelines that will allow more borrowers with less than a 20% down payment to qualify for conventional mortgage loans.
Under its expanded guidelines, Genworth now will accept a minimum Fair Isaac Corp. credit score of 700 for loans with debt-to-income levels of 41% to 45%, eliminate guideline distinctions for retail and third-party lender originations and broaden cash-out refinancing eligibility for condominiums.
The insurance holding company will also provide insurance coverage for mortgages that meet the guidelines for evaluation of consumer credit trade lines and financial reserves from the automated underwriting systems offered by Fannie Mae (FNMA) and Freddie Mac (FMCC).
Genworth will also reduce monthly premium rates for borrower and lender-paid insurance on all mortgages with loan-to-value ratios of 95% or less, and all mortgage loans to borrowers with FICO credit scores of less than 760 will be eligible for new, reduced mortgage insurance rates.
Genworth also is introducing new, lower rates for mortgage lenders on monthly and single-premium-payment plans for borrowers with FICO credit scores of 760 or higher.
"These pricing and guideline adjustments will make it easier for our lender partners to offer affordable mortgage insurance coverage to more borrowers and position USMI to compete in our targeted market segments, while maintaining a disciplined risk-management approach," said U.S. Mortgage Insurance President and Chief Executive Rohit Gupta.
The guideline and pricing changes will take effect May 14.