+ MGIC-related Links
Menu

MGIC’s new Master Policy

Our new Master Policy, #71-43342 (10/14), has been approved by Fannie Mae and Freddie Mac and all regulatory jurisdictions.

We will activate our new GSE-approved Master Policy on Oct. 1, 2014, to meet the requirements announced by Fannie Mae and Freddie Mac.

Our new Policy will cover loans where the initial MI application is received on or after Oct. 1, 2014, even if the loan application date is before then. Resubmitted MI applications initially received before Oct. 1 will be covered under MGIC Master Policy #71-7135 (8/94), also GSE-approved.

On or before the effective date, we will e-mail your new Declarations page and a link to the Master Policy.

Resources

Access the new Master Policy and Endorsements in the Resources column at right. These have not been approved in all states and are subject to changes before implementation.

top

Gold Cert Coverage

Our Gold Cert Coverage offers rescission relief from Borrower misrepresentation, underwriting errors and Material Value Variances for all Loans after 36 months. You can also opt for this protection at 12 months.

All Loans, regardless of how you submit them, are eligible for either coverage level. The 12-month option requires that you submit Verification Information at application and/or after you notify MGIC to activate insurance.

36-Month Coverage

All Loans receive Gold Cert rescission relief from borrower misrepresentation, underwriting errors and Material Value Variances after 36 months if:

  • The Loan is current
  • All Loan Payments were made from the Borrower's Own Funds
  • No more than 2 Loan Payments were 30 days late; no Loan Payment was 60 or more days late
  • The Loan was not subject to a Workout
  • There is no First-Party Misrepresentation or Pattern Activity

top

12-Payment Protection

You have the option to request Gold Cert 12-Payment Protection, which provides rescission relief for borrower misrepresentation and underwriting errors and for Material Value Variances if all of the following are met:

  • You submitted Verification Information as required, and the Loan passed our 12-Payment Protection Review
  • The Loan was not subject to a Workout
  • None of the first 12 Loan Payments was 30 or more days Delinquent
  • All Loan Payments were made from the Borrower's Own Funds
  • There is no First-Party Misrepresentation or Pattern Activity

top

Verification Information

To request 12-Payment Protection for borrower misrepresentation, underwriting errors and Material Value Variances, submit the required Verification Information within 90 days of when you notify us to activate insurance.

Verification Information Requirements

  • MGIC Delegated MI Underwrite Loans — Submit a complete Loan Origination File and Closing File
  • MGIC MI Underwrite Loans — Submit:
    • Any Loan Origination File documents submitted at MI application that have changed since
    • Any Loan Origination File documents that were not submitted at MI application
    • A complete Closing File
  • MGIC MI Underwrite/Full-Doc Review Loans — Submit:
    • Any Loan Origination File documents submitted at MI application that have changed since
    • A complete Closing File

Loan Origination File Documents

  • MGIC Mortgage Insurance Application
  • Agency AUS Findings/Feedback Report, if applicable
  • 1008/1077 Uniform Underwriting and Transmittal Summary
  • 1003/65 Original Loan Application
  • Credit report and all other credit documentation, including Verification of Rent or Mortgage
  • Income and employment verification for all Borrowers
  • Asset verification for all Borrowers
  • Appraisal, including all addenda, attachments, schedules, photographs and other information included by the appraiser
  • Sales contract or equivalent
  • Loan approval notes
  • Underwriting and processing notes
  • Any other document used in the underwriting process not listed above

Closing File Documents

  • Final HUD-1 Settlement Statement or other settlement statement signed by the Borrowers
  • Signed promissory note
  • Signed Mortgage
  • Title insurance commitment
  • Any other closing-related documentation that we may request

To request 12-Payment Protection for Material Value Variances only, submit the required Verification Information within 90 days of when you notify us to activate insurance.

Verification Information Requirements

  • MGIC Delegated MI Underwrite Loans — Submit the appraisal and other Property valuation information
  • MGIC MI Underwrite Loans — Submit the appraisal and other Property valuation information, ONLY IF it wasn't submitted at MI application or it has changed since
  • MGIC MI Underwrite/Full-Doc Review Loans — Submit the appraisal and other Property valuation information ONLY IF it has changed since MI application

Appraisal Documents

  • Appraisal, including all addenda, attachments, schedules, photographs and other information included by the appraiser

top

Underwriting

Underwriting Documentation Submission Options

Under the new Policy, flexible submission options allow you to continue to tailor the way you do business, submitting data and/or documents.

Delegated MI Underwrite

To apply for MGIC mortgage insurance under our Delegated MI Underwrite program, you must:

  • Meet program requirements
  • Have our Delegated Underwriting Endorsement

Submit data-only files via the Loan Center, your LOS or other electronic data interface.

When you apply for MGIC MI through our Delegated MI Underwrite program, you represent:

  • Data is true and accurate and consistent with the Loan Origination File
  • The Loan meets our Eligibility Criteria

We are not responsible for:

  • The accuracy of the data you submit
  • Determining whether the information you submit meets our Eligibility Criteria

If you don't qualify for our Delegated MI Underwrite program, apply for MI via our MGIC MI Underwrite or MGIC MI Underwrite/Full-Doc Review programs below.

Advantages of using our Delegated MI Underwrite:

  • You don't need to gather, scan and submit any documents
  • With a data-only submission, you'll typically receive a response in less than one minute
  • You have the option of adding Gold Cert 12-Payment Protection for Borrower misrepresentation, underwriting errors and Material Value Variances or just Material Value Variances by submitting the appropriate Verification Information

top

MGIC MI Underwrite

Submit documents with your MGIC MI application via the Loan Center or other document delivery service, fax or courier.

Upon reviewing the documents you submit, we may request additional documentation.

When you apply for MGIC mortgage insurance with an MGIC MI underwrite, you represent:

  • Submitted Loan documentation is true and correct
  • The information you have not submitted meets our Eligibility Criteria

We are responsible for:

  • Accurate data entry
  • Determining whether the information you submit meets our Eligibility Criteria

Advantages of using our MGIC MI Underwrite:

  • You have fewer documents to gather, scan and send
  • We are responsible for evaluating the documents you submit
  • We make an MI underwriting decision based on the documents you submit
  • You have the option of adding Gold Cert 12-Payment Protection for Borrower misrepresentation, underwriting errors and Material Value Variances or just Material Value Variances by submitting the appropriate Verification Information

top

MGIC MI Underwrite/Full-Doc Review and ATR Check

This option can simplify post-closing work for 12-Payment Protection and provides MGIC's ATR Check.

Submit a complete Loan Origination File via the Loan Center or other document delivery service, fax or courier.

When you apply for MGIC mortgage insurance with an MGIC MI Underwrite/Full-Doc Review:

  • You represent:
    • Submitted Loan documentation is true and correct
    • You have no other information that affects compliance with our Eligibility Criteria
  • We are responsible for:
    • Accurate data entry
    • Determining whether the information you submit meets our Eligibility Criteria
    • Reviewing Loan documentation, based on the Consumer Financial Protection Bureau's (CFPB) Ability to Repay (ATR) checklist regarding Borrowers':
      • Current or reasonably expected income or assets
      • Current employment status
      • Monthly payment on the covered transaction
      • Monthly payment on any simultaneous Loan
      • Monthly payment for Mortgage-related obligations
      • Current debt obligations, alimony and child support
      • Monthly debt-to-income ratio or residual income
      • Credit history

Please note: MGIC is not a creditor subject to the Dodd-Frank Ability-To-Repay (ATR) determination requirements, and our ATR Check is not intended to satisfy your independent responsibility for complying with regulatory or investor requirements. We review only your submitted loan documentation, and we do not independently reverify any information for ATR determination.

Submission Documents

  • MGIC Mortgage Insurance Application
  • 1008/1077 Uniform Underwriting and Transmittal Summary
  • Agency AUS Findings/Feedback Report, if applicable
  • 1003/65 Original Loan Application
  • Credit report and all other credit documentation, including Verification of Rent or Mortgage
  • Income and employment verification for all Borrowers
  • Asset verification for all Borrowers
  • Appraisal, including all addenda, attachments, schedules, photographs and other information included by the appraiser
  • Sales contract or equivalent
  • Loan approval notes
  • Underwriting and processing notes
  • Any other document used in the underwriting process not listed above

Advantages of using our MGIC MI Underwrite with Full-Doc Review:

  • We are responsible for underwriting errors
  • You pay no fees for this service
  • We review the appraisal for Gold Cert 12-Payment Protection

New MGIC Underwriting Guide

Our new Underwriting Guide incorporates changes and updates for doing business with MGIC under our new Master Policy. Reorganized for improved usability, the new Guide will be effective Oct. 1, 2014.

top

Servicing

Impact Summary for Servicers

Our Impact Summary for Servicers highlights changes you can expect with the new Master Policy and identifies sections of the document that may affect your servicing processes.

Servicing Guide

The Servicing Guide provides clarity, transparency and information related to our servicing guidelines. This guide is a combination of our current MI Servicing and Default Servicing Guides and incorporates changes as a result of the new Master Policy.

The new guide will become effective with MGIC’s new Master Policy as of Oct. 1, 2014. The existing MI Servicing and Default Servicing Guides remain your reference documents until that time.

Servicing Report

Our new Master Policy requires servicers to submit a monthly Servicing Report, which includes loan status and other key information for all your MGIC-insured loans (both current and in default) insured under the new policy. To make this process easier, you can submit this information for your entire MGIC-insured portfolio. The Servicing Report should be submitted by the 25th of the month for the prior month's ending status.

We will use these reports to be sure our records align and meet our GSE reporting requirements.

We provide three Servicing Report template options. Choose the template that best fits your current or future processes:

Report Name Description Data Elements Templates Version
MGIC Data Set Our minimum data set to meet the Servicing Report requirement. 19 MGIC Data Set October 2014
MILAR* — 32 This abbreviated template includes a subset of the industry-approved data fields and is intended for servicers who do not currently submit the MILAR—169. 32 MILAR-32 April 2014
MILAR* — 169 This is an MI-industry-approved template for reporting insured loan status. 169 MILAR-169 May 2014

*Mortgage Insurance Loan Activity Report

Timing

We recognize that it may take some time for you to develop a reporting process, therefore, we will require this report no sooner than July 1, 2015. See our recent Servicing Bulletin (09/16/2014). As of July 1, 2015, one of the MGIC-accepted options identified above must be used to submit loan portfolio data on a monthly basis.

Other Reporting

The Servicing Report will not change or replace any reports you currently provide. Reports such as defaults, loan modifications, MI cancellations or any other specific reporting are still required.

Loan modification reporting can be accomplished via the MILAR-169 report if the appropriate data elements are provided. Contact your MGIC Servicing Relationship Manager for details on this approval process.

Report Submission

Submit your completed template using one of these options:

  • MGIC's Secure File Transfer (SFT) — Select Servicing Report as the file recipient
  • Secure e-mail to servicingreport@mgic.com
  • Any other MGIC-approved secure document delivery service

Service Bureaus

We are working with service bureaus to develop a standardized servicing report. We will provide updates as this effort progresses. Contact your service bureau for more specific information.

top

Q & A

General

How will the new Master Policy be distributed?

On or before Oct. 1, we will e-mail all Master Policyholders a new Declaration Page along with a link to the Master Policy and all endorsements.

The Declaration Page states the effective date of the new Policy and identifies:

  • You as the insured
  • Your Master Policy number
  • All applicable endorsements and notices
  • Your principal place of business
    • We are issuing the policy only to the principal place of business of the Insured, as reflected in our records
    • The Policy covers all of the Insured's branches
    • The Commitment/Certificate will identify the originating branch

top

Can I review the new Master Policy now?

Yes, here is the new Master Policy. You may also view all endorsements to the new Master Policy.

We first posted the new Master Policy, with a revision date of 2/14, in March 2014. In July 2014 we reposted the Policy with a revision date of 10/14 to reflect the actual effective date. We also removed the "Sample" watermark. Aside from these two superficial changes, content in the 2/14 and 10/14 versions of the Policy is identical.

We made the same changes to the endorsements.

top

Do I need to sign something to be activated under the new Master Policy?

No, you do not need to sign anything. No action is required on your part. The terms of the new Policy will cover all MI applications you submit beginning on the effective date noted on your Declaration Page.

top

Why are you issuing Delegated and co-op endorsements to all customers?

All data submissions will be covered under our Delegated Endorsement. All customers who are eligible for data-only submissions will need this endorsement.

By issuing the co-op endorsement to all customers, we will eliminate delays associated with issuing a new endorsement for any customers who are or become involved in co-op Loans.

top

Will the Commitment/Certificate be different?

There will be several key changes to the Commitment/Certificate:

  • It displays both the Insured's principal place of business and ordering branch office
  • Your Loan number is now displayed on the top of the document to locate more easily
  • The Endorsements and Notes section will show the new Master Policy form number as well as those for all applicable endorsements
  • The Endorsements and Notes section will also note the applicable underwriting program — Delegated, MGIC MI Underwrite or MGIC Underwrite/Full-Doc Review
  • With the new Commitment/Certificate, you will have the option to display the borrower's DTI based on our calculation and used to approve the loan for MI

top

Rescission Relief

What rescission relief features does your new Master Policy include?

All Loans, regardless of how you submit them, are eligible for our Gold Cert rescission relief.

Rescission relief after 36 months

All Loans receive Gold Cert rescission relief for Borrower misrepresentation, underwriting errors and Material Value Variances after 36 months if:

  • The Loan is current
  • All Loan Payments were made from the Borrower's Own Funds
  • No more than 2 Loan Payments were 30 days late; no Loan Payment was 60 or more days late
  • The Loan was not subject to a Workout
  • There is no First-Party Misrepresentation or Pattern Activity

Rescission relief after 12 months

The same rescission relief protections are available after only 12 months under Gold Cert 12-Payment Protection rescission relief if you submit certain required documentation to us within 90 days of notifying us to activate insurance coverage.

  • For protection against rescission due to Borrower misrepresentation, underwriting errors and Material Value Variances, submit complete Loan Origination and Closing Files
  • For protection against rescission due to Material Value Variances only, submit complete appraisal and other Property valuation information, including all addenda, attachments, schedules, photographs and other information included by the appraiser

Our review of the documentation will determine whether the Loan is eligible for Gold Cert 12-Payment Protection. Eligible Loans receive rescission relief when:

  • None of the first 12 Loan Payments was 30 or more days Delinquent
  • All Loan Payments were made from the Borrower's Own Funds
  • The Loan was not subject to a Workout
  • There is no First-Party Misrepresentation or Pattern Activity

top

Are there any additional fees for the Gold Cert 12-Payment Protection?

No, but you must submit certain required documentation to us within 90 days of notifying us to activate insurance coverage.

top

What documents does MGIC require as Verification Information for a Loan to be considered for Gold Cert 12-Payment Protection?

For protection against rescission due to Borrower misrepresentation, underwriting errors and Material Value Variances, submit complete Loan Origination and Closing Files.

top

What is MGIC going to do with the information in the Loan Origination and Closing Files?

In order to grant Gold Cert 12-Payment Protection for Borrower misrepresentation and underwriting errors, we are required by the Agencies to reunderwrite the Loan File to ensure:

  • There are no inconsistencies
  • The transaction closed as represented in the Origination File

This reunderwrite must be more than a standard MI underwrite in that, should we discover any questionable information, we are obligated to take any reasonable steps necessary to confirm that there are no material deficiencies in the information or the underwrite.

Regarding value, we must confirm that the value we are relying upon is supported by the appraisal and other Property valuation information.

top

What is "Pattern Activity"?

Pattern Activity means a pattern of misrepresentations related to or in connection with Eligibility Criteria, whether by information furnished, omitted, falsified or forged, involving two or more Loans, at least one of which is insured by us, and either:

  • Two or more Pattern Parties or
  • The Borrower and one or more Pattern Parties

A Pattern Party is:

  • Any individual acting with actual or apparent authority for the Initial Insured
  • Any First Party other than the Initial Insured
  • Any Property seller, Property builder, real estate broker or real estate agent

A First Party, with respect to a Loan, is the Initial Insured and any other Persons (other than the Borrower or the Borrower's agent) who performed or had a duty to perform any acts related to the Insurance Application or Origination of such Loan. See MGIC Master Policy Section 1, Definitions, for details.

top

What does "not subject to a Workout mean"?

A Workout means any assumption or modification of the terms of a Loan, regardless of its status, including:

  • Any change in the principal balance, interest rate, payment terms or amortization schedule
  • Any change in or release of the Property, subject to the Mortgage
  • Any forbearance or partial release of the Borrower's Loan obligations
  • A Pre-Settlement Sale by the Borrower
  • Acceptance of a deed in lieu of foreclosure

Loans subject to any of the events listed above are not eligible for Gold Cert 12- or 36-month rescission relief.

top

Does MGIC still allow a variance of up to 15% of the Property value?

Yes. Our new Master Policy defines a "Material Value Variance" as an Eligibility Criteria Violation relating to the Property value that exists when:

  • There is a percentage variance of 15% or more between the Origination Valuation and the opinion of market value for the subject Property, as determined by a licensed appraiser in an appraisal report prepared at our request as of the date of the Origination Valuation in compliance with industry standard appraisal practices, AND
  • The loan-to-value ratio calculated as of the Certificate Effective Date using the appraised value from our requested appraisal report does not meet the Eligibility Criteria applicable to the Loan

Determine the percentage variance by dividing the difference between the two values by the Origination Valuation, expressed as a percentage.

top

What is the MGIC MI Underwrite/Full-Doc Review with ATR Check?

It's a new underwriting submission option that can simplify post-closing work for 12-Payment Protection and provides MGIC's Ability to Repay Check.

After you've determined that Loan documentation meets our Underwriting Requirements, submit a complete Loan Origination File via the Loan Center or other document delivery service, fax or courier.

We will simultaneously review Loan information for compliance to our MI Underwriting Requirements and to Consumer Financial Protection Bureau (CFPB) Ability to Repay (ATR) considerations.

top

Servicing

Are there any changes to Premium billing?

Yes. Under the new Policy, if a Loan is in Default, we will continue to bill for renewal Premiums.

Your Premium billing cycle and the method by which you receive your bill will continue as it is today.

top

Does the new Master Policy change the timing of when a Claim should be filed?

No. Continue to file Claims within 60 days of the earlier of:

  • Acquisition of Borrower's Title
  • Completion of a Property Sale

In states where a redemption period exists, you have the option to file the Claim anytime after the foreclosure sale date, but no later than 60 days after the expiration of the redemption period.

top

Do the submission options for Claim filing change?

No. Continue to file Claims as you do today. See our current Claim submission options.

top

When should I submit Claim documents to MGIC?

Continue to submit Claim documents as you do today:

  • Ahead of Claim filing to expedite processing your Claim
  • At Claim filing
  • When we request documents

top

Are the required Claim documents changing?

No. See the current MGIC Default Servicing Guide for required Claims documentation.

top

What happens after a Claim is filed?

As we do today, we will acknowledge receipt of your Claim. No later than 20 days after receipt, we will inform you of any additional Claim documentation or information we need to process your Claim. We will provide up to two additional reminder requests for missing information.

top

top

Endorsements

We will issue all Master Policyholders the following endorsements to MGIC's new Master Policy:

Delegated Underwriting Program (All jurisdictions except Montana. For Montana, see state-specific section.)

Cooperative Properties (All jurisdictions except Puerto Rico)

State-Specific Endorsements

Please note: The endorsements listed above do not apply to MGIC's current Master Policy; they are endorsements to the new Master Policy.

top