Printer Friendly

MGIC OFFERS NEW PREMIUM PLAN TO IMPROVE AFFORDABILITY FOR HOME BUYERS PREMIUM OPTION AVAILABLE TO ALL CUSTOMERS, OFFERS SIMPLIFIED SERVICING

 MILWAUKEE, Aug. 17 /PRNewswire/ -- Mortgage Guaranty Insurance Corporation (NYSE: MTG)(MGIC) has announced it will offer a new premium plan -- "MGIC Monthly Premiums" -- that enables borrowers to pay just one month's mortgage insurance premium at closing, rather than a full year's premium, thereby significantly reducing the cash borrowers need for mortgage insurance at closing.
 Since no special processing technology is required, monthly premiums are available to all MGIC customers. The new plan also provides simplified servicing, with only minor servicing modifications necessary. Fannie Mae and Freddie Mac have agreed to purchase mortgages insured with MGIC Monthly Premiums and, subject to state insurance department approval, the monthly premium rates will be available September 1, 1993.
 MGIC Monthly Premiums improve housing affordability, which is particularly important to borrowers who have difficulty accumulating cash for closing, but who are otherwise qualified to buy a home. Borrowers can reduce the cash needed at closing for mortgage insurance up to 95 percent using the new plan, in exchange for a slightly higher monthly payment.
 Using MGIC Monthly Premiums, a borrower with a 5 percent down payment on a $100,000 home and a 30-year fixed-rate mortgage, pays $50.67 for mortgage insurance at closing, and the same amount each month thereafter as part of the monthly payment. This represents a savings of $899.33 for mortgage insurance at closing compared to a standard annual plan. The increase in the borrower's monthly payment is $11.88.
 Saving for down payment and closing costs represents the biggest barrier to homeownership today. For low -- and moderate -- income households the obstacle is especially difficult to overcome. MGIC Monthly Premiums provide an excellent affordability tool to help more low- and moderate-income households buy their first homes sooner.
 "MGIC Monthly Premiums represent one more premium option that MGIC is pleased to offer our customers to help expand originations and improve affordability for home buyers. The new monthly premiums complement our existing programs of Standard Annuals, Level Annuals, and Life-of-Loan Single Premiums," Curt Culver, executive vice president - Marketing, said. "MGIC Monthly Premiums are available to all MGIC customers, on all property types, mortgage terms, loan types, loan-to- value ratios and coverages currently available."
 Servicers have the option to remit monthly premiums either electronically, via MGIC's Automated Renewal Billing (ARB) system, or through traditional mail billing processes. Providing the MGIC Monthly Premiums to all MGIC customers, rather than limiting the plan to ARB customers, ensures that servicers will be able to freely transfer servicing without having to consider if the purchaser has ARB capabilities.
 Servicing is simplified because MGIC Monthly Premiums billing tape formats, payment cycles, processes and due dates are compatible with existing annual premium processing systems. The minor servicing changes deal with term of insurance issues, since the premiums are billed monthly rather than annually.
 To further simplify servicing, MGIC worked closely with leading national service bureaus and major mortgage lenders to design monthly premium servicing procedures compatible with existing systems, and will continue to work with servicers and lenders to implement the new plan.
 MGIC is a leading provider of private mortgage insurance coverage in the United States. Private mortgage insurance covers residential first mortgage loans and expands homeownership opportunities by enabling people to purchase homes with less than 20 percent down payments. Private mortgage insurance also facilitates the sale of low down payment first mortgage loans in the secondary mortgage markets.
 MGIC MONTHLY PREMIUMS
 FACT SHEET
WHO: Mortgage Guaranty Insurance Corporation (MGIC)
WHAT: "MGIC Monthly Premiums"
 -- Enable borrowers to pay one month's mortgage
 insurance premium at closing, rather than a full
 year's premium.
 -- Significantly improve housing affordability by
 reducing cash borrowers need for mortgage
 insurance at closing by 95 percent, in exchange
 for a slightly higher monthly payment.
 -- Available on all property types, mortgage terms,
 loan types, loan-to-value ratios and MGIC
 coverages currently available.
 -- Compatible with lenders' existing premium
 processing systems. No special processing
 technology is required for servicers to remit
 monthly premiums, which borrowers pay as part of
 the monthly payment.
 -- Approved by Fannie Mae and Freddie Mac.
WHERE: Available nationwide for all MGIC customers.
WHEN: Subject to state insurance department approval, MGIC
 Monthly Premiums will be available September 1, 1993.
WHY: Improve housing affordability, which is particularly
 important for borrowers who have difficulty
 accumulating cash for closing costs, but who are
 otherwise qualified to buy a home.
 Provide affordability tool to help more low- and
 moderate-income households purchase homes sooner.
 Help lenders expand originations.
HOW: Servicers have the option to remit monthly premiums
 either electronically via MGIC's Automated Renewal
 Billing (ARB) system, or through traditional mail
 billing processes.
 Since billing tape formats, payment cycles, process and
 due dates are compatible with existing annual premium
 processing systems, servicing is simplified.
 Only minor servicing changes are required. These
 modifications relate to term of insurance issues
 because premiums are billed monthly rather than
 annually.
 -0- 8/17/93
 /CONTACT: Curt Culver of MGIC, 414-347-6632/
 (MTG)


CO: Mortgage Guaranty Insurance Corporation ST: Wisconsin IN: INS SU:

DB -- MN008 -- 3597 08/17/93 13:39 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 17, 1993
Words:834
Previous Article:ORION TO DISTRIBUTE TWO FILMS FROM STEINHARDT BAER PICTURES
Next Article:OLYMPIC FINANCIAL LTD. REPORTS SALE OF $100 MILLION IN ASSET-BACKED SECURITIES
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters