Blog of the Mortgage

State of California a Declining Value region. Further, they will no longer insure, in California, the following loans:

From Declining Value Policy (Effective 03/21/08).

<!--[if !supportLists]-->· <!--[endif]-->A-Minus loans, investment properties, cash-out refinances, and loans with reduced documentation on declining value properties are not eligible for RMIC coverage (Effective 03/21/08).

<!--[if !supportLists]-->· <!--[endif]-->LPMI preferred pricing will require a minimum representative FICO score of 720 on declining value properties (Effective 03/21/08).

<!--[if !supportLists]-->· <!--[endif]-->Loans secured by condominiums determined to be of declining value will be limited to a maximum LTV of 90%, except where the LTV is limited to less than 90% by other factors (Effective 03/21/08).

<!--[if !supportLists]-->· <!--[endif]-->All refinance loans (would have to be rate/term) on properties in the states of AZ, CA, FL, MI, NV and OH which have a total debt to income ratio (DTI) over 45% must be submitted full package to RMIC for underwriting, regardless of AUS decision (Effective 03/21/08).

Effective March 3^rd, MGIC, is following suit and also will no longer insure Investment Properties, Cash-Out Refinances or Stated Income in California. MGIC is requiring max Ratios of 45 on owner occupied and 41 on Second Homes, regardless of AU findings, in distressed markets.

PMI and GE have not indicated similar changes as of yet. It appears they will still insure Investor loans to 85% and cash-out owner occupied to 90% in declining areas. However, it is never good policy to allow your company to be adversely targeted for riskier loans, particularly in the Insurance Game. I anticipate they will announce similar changes by end of the quarter. Non-owner and Cash-out to 80%, with ratios to 45?

Wowzer!