Wednesday, May 4, 2011

PMI Expands LTVs and Credit Scores in Distressed Markets

PMI Mortgage Insurance Co. is seeing signs of strengthening in markets the firm classifies as “distressed,” enough so that the private mortgage insurer is relaxing its requirements for loan-to-value (LTV) ratios and minimum credit scores.

The California-based insurer issued a bulletin last week announcing that it is raising the LTV to 95 percent for both purchase transactions and rate-term refinances in distressed markets, as long as the borrower has at least a 720 credit score.

In addition, PMI has lowered the minimum credit score requirement to 680 for LTVs at or below 90 percent on one-unit properties and condominiums. The LTV max for co‐ops is 85 percent, and the lower credit score minimum of 680 also applies.

The company says it plans to add the entire states of Arizona and Florida to the list, effective July 1. Attached housing remains ineligible for mortgage insurance in the state of Florida.