My borrowers payment statement shows they do not have PMI. My DU approval says they do. Turns out that it was an old Sub-Prime loan that had lender paid MI. Is there anyway to transfer lender paid MI to new loan? Or, is there another way to do this loan? We are at 104% LTV with 780 FICO and 43% DTI. Thanks! 

Hi Chris,

Will this help you?

"For existing loans with an original LTV ratio over 80% that currently have MI
coverage in force, the new loan will require only the lesser of standard MI
coverage or the existing MI coverage. Lenders are encouraged to use their
best efforts to obtain MI coverage that provides the lowest-cost option
available to the borrower."

For more details please read page 7 and other pages.

http://www.swanloans.com/?pgcnfID=105583

Jacob Varghese
Certified Mortgage Coach
NMLS 327086
DRE 01790347

I guess the next step for me is to find a lender who has an MI company that can do this, or an MI company itself to introduce to my lenders...

Thank you for the reply Jacob.

If it had lender paid MI and is owned by Fannie it was not subprime as subprime did not charge MI. As for getting LPMI transferred on a HARP deal...I do not believe it is possible. I would be interested to know if I am wrong...but to my knowledge the answer is no.

Good Luck,

Jason

If the MI was a one time Lump Sum or Single Premium, you may be able to, check with the MI company to verify they are ok to transfer at that LTV and if they charge any fees,

If the MI is Lender Paid Monthly, then borrower will have to go back to current servicer

been down this road several times this year

Ken,

Do you know how to find out what MI company they have or how to see if it was lump sum or monthly? Thank you for your input! 

Jason: The lender was First Franklin and the loan was later was sold to Fannie Mae.  Borrower does not pay a monthly MI but DU showed the current loan has MI. They were also at 8.5% so I assumed that was a subprime rate. I believe you are right as I am learning... The only fix I have found is if it is 95% or lower, don't do it through HARP. Instead, do it conventionally with new lender paid MI. Seems the rate is only about .25% higher and it beats having to get new monthly MI. 

Chris

your DU findings should tell you who the MI company is and the Cert number, if the loan is DURP eligble

If you can get to 95% than yes...a new LPMI deal makes sense. If the deal is at 104% then it would have to go DU Refi Plus. In which case I thought the deal would be dead because it was originally LPMI...but if Ken says that some servicers will allow you to transfer LPMI...than I believe it.

on the ones I have done, where the original PMI was as LPMI Single Premium, we rolled the old MI policy to the new loan, they call it a HARP Modification, so there was no new premium charged, with some MI companies they do charge a fee to do the Modification, MGIC charges a 1/2 point as an example

Only works on HARP refis

I have been able to do quite few of these, every MI company has a differnt policy so double check

if you are a broker or correspondent lender, you will need to check with your lender/investor

That is interesting to know. We won't do any outside HARP and even with PNC to PNC we won't do deals that had LMPI...hopefully issues like this can be improved with any expansion of HARP. I gather you can do outside (deals you don't already service) HARP? If so do you guys have overlays?

Yep, we do outside HARP deals, we UW straight to DU/LP Findings on Conventional, some overlays on Govies

on the MI transfers, some of the MI companies will not let your transfer the MI to a new servicer

so you have to becarefull and deal with that part up front

I do hope we hear some good news on HARP extensions, and would like to see a  program that will allow us to refi some Non Agency deals too although I feel that is unlikley