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MGIC announces underwriting changes, restricted market changes and new premium plans.

• Underwriting and market changes that are less restrictive will be effective with MI applications received by MGIC on or after Monday, March 8, 2010.
• Underwriting and market changes that are more restrictive will be effective with MI applications received by MGIC on or after Monday, March 22, 2010.
• The new premium plans will be effective Saturday, May 1, 2010, subject to regulatory approval.

Guideline & Restricted Market Changes
(Effective Monday, March 8, 2010)

• Changing MGIC’s valid credit score requirement to a minimum of  3 tradelines evaluated for 12 months. Loans without valid credit scores must meet our nontraditional credit guidelines.

Primary Residence / Nonrestricted Markets / Retail Originations

• Reducing the minimum FICO to 660 on purchase transactions of 1-unit properties up to 95% LTV
• Maximum DTI for purchases with a FICO of 740 or greater – 45%

• Allowing the payoff of a purchase-money second mortgage with a Rate-and-Term refinance if:
  • the junior lien was originated as a purchase-money second mortgage (seller or institutional financing) with the first and second lien recorded simultaneously, OR
  • the only draw of a Home Equity Line of Credit (HELOC) was for the acquisition of the subject property and is supported by the HUD-1 and loan history.
  • LTV is 90% or lower AND
  • FICO is 720 or greater.

• MGIC no longer applies Restricted Market guidelines to properties in Nonrestricted Markets identified by the appraiser, lender or investor as being in a neighborhood with declining values.

Restricted Market Changes

Moving from Tier One Restricted Market Status to Nonrestricted Market Status

• Bridgeport-Stamford-Norwalk, CT   (CBSA – 14860)
• Hartford-West Hartford-East Hartford, CT   (CBSA – 25540)
• Norwich-New London, CT    (CBSA – 35980)
• Wilmington, DE    (CBSA – 48864)
• Washington, DC    (CBSA – 47894)
• Elkhart-Goshen, IN    (CBSA – 21140)
• Gary, IN    (CBSA – 23844)
• Baltimore-Towson, MD    (CBSA – 12580)
• Bethesda-Rockville-Frederick, MD    (CBSA – 13644)
• Hagerstown-Martinsburg, MD    (CBSA – 25180)
• Barnstable Town, MA    (CBSA – 12700)
• Boston-Quincy, MA    (CBSA – 14484)
• Worcester, MA    (CBSA – 49340)
• All of Michigan except:
  • Ann Arbor, MI    (CBSA – 11460) and
    Flint, MI    (CBSA – 22420), which remain Tier One Markets
  • Warren-Troy-Farmington Hills, MI    (CBSA – 47644) and Detroit-Livonia-Dearborn, MI    (CBSA – 19804), which move to Tier Two Markets
• Minneapolis-St. Paul-Bloomington, MN    (CBSA – 33460)
• Atlantic City-Hammonton, NJ    (CBSA – 12100)
• Camden, NJ    (CBSA – 15804)
• Ocean City, NJ    (CBSA – 36140)
• Trenton-Ewing, NJ    (CBSA – 45940)
• Albuquerque, NM    (CBSA – 10740)
• Poughkeepsie-Newburgh-Middletown, NY    (39100)
• Eugene-Springfield, OR    (CBSA -21660)
• Portland-Vancouver-Hillsboro, OR    (CBSA – 38900)
• Providence-New Bedford-Fall River, RI    (CBSA – 39300)
• Ogden-Clearfield, UT    (CBSA – 36260)
• Salt Lake City, UT    (CBSA – 41620)
• Winchester, VA    (CBSA – 49020)

Guideline & Restricted Market Changes
(Effective Monday, March 22, 2010)

All Markets / All Origination Sources

• Interest-only loans (I/Os) – not eligible
• Graduated payment mortgages (GPMs) – not eligible

• Maximum loan amortization period – 30 years

Restricted Market Changes

• Atlanta-Sandy Springs-Marietta, GA   (CBSA – 12060)
• Chicago-Naperville-Joliet, IL   (CBSA – 16974)
• Warren-Troy-Farmington Hills, MI    (CBSA – 47644)
• Detroit-Livonia-Dearborn, MI    (CBSA – 19804)
• Nassau-Suffolk, NY    (CBSA – 35004)
• New York-White Plains-Wayne, NY    (CBSA – 35644)

New Credit-Tiered Monthly Premiums
(Effective Saturday, May 1, 2010 • Subject to Regulatory Approval)

MGIC is replacing its current premium plans with rates that incorporate credit scores to tier premiums. With these new rate plans, borrowers with better credit ratings receive lower MI premium rates, and borrowers with weaker credit ratings receive higher MI premium rates. Given today’s high-quality lending environment, we expect that most borrowers will benefit by receiving lower premium rates.

These new credit-tiered rates will go into effect May 1, 2010, and become MGIC’s standard rates. Customers who find it difficult to make the transition to credit-tiered premiums will be able to continue using our existing premium rate structure. To continue using existing premium rates, contact your MGIC Account Manager no later than Friday, April 16, 2010.

Sample New Credit-Tiered Monthly Premiums for Fixed-Rate Loans

Sample New Credit-Tiered Monthly Premium Adjustments

*Also includes approved loans with Nontraditional Credit, or a DU EA or LP A-.

NOTE: All rates are subject to loans meeting MGIC’s underwriting guidelines at the time of submission to MGIC.

Complete Monthly, Single, Splits and Annual rate cards with premium adjustments will be posted to our website by April 5, 2010. These rates will apply to both borrower-paid and lender-paid mortgage insurance.

See www.mgic.com for more information regarding the Steps for Determining Your Credit-Tiered Premium.