All new MI Master Policies went into effect for MI applications submitted on or after October 1, 2014.
All new Master Policies are NOT the same! Don’t be fooled by other MI’s attempts to tell you otherwise. When providing “rescission relief”, other MI’s apply different definitions to investigation relief and appraisal overstatement. National MI has the most favorable terms on these items. National MI restricts the ability to INITIATE an investigation. Others only limit the manner in which investigations are conducted. And for appraisal overstatements, National MI must produce credible evidence of appraiser manipulation in addition to the 15% overstatement. These differences are SIGNIFICANT.
National MI was the first to provides 12-month rescission relief, via an endorsement filed in December 2013. In October, you will continue to benefit from the most competitive terms of coverage available in the industry.
Given that National MI already provided the best terms of coverage possible, the required changes in our new Master Policy are minimal:
- National MI’s new Master Policy: Provides rescission relief after 12 months of timely consecutive Borrower payments on every independently validated loan. (or 36 months for loans that are not independently validated)
- Removes “fraud, misrepresentation and negligence” exclusion:
o Centralizes remedy for origination issues into existing reps and warrants provision
o Eliminates redundancy and ambiguity
- Provides additional defined terms that are used in connection with providing rescission relief at 12 months, including “Credible Evidence” and “Independent Validation.”
Although all MI’s now offer 12 month rescission relief, National MI pioneered the concept of early rescission relief by being the first to offer this. National MI strongly believes that choosing the 12 month option is a smart choice, as the 24 month difference greatly reduces risk. But it is understood that some lenders desire a 36 month option, National MI now offers that choice. And National MI offers the best available rescission relief regardless of the option chosen.
All loans submitted under MI applications received by National MI prior to October 1, 2014 are insured under the old Master Policy for the life of the coverage. The terms of coverage in the new Master Policy are substantially similar to the terms of coverage in our old Master Policy. As we have mentioned, with respect to rescission relief, both policies offer the same terms of coverage. You can be assured that your National MI insured loans have the best terms of coverage available.
No. As required by the GSEs, all loans submitted to National MI under mortgage insurance applications received by National MI on or after October 1 are covered under the new Master Policy.
A copy of the Master Policy can be found on our website. Our Master Policy has been approved by the GSEs, and in 50 states and the District of Columbia.
There is no action required by National MI’s existing customers to execute our Master Policy. New customers with National MI will execute our Master Policy by providing an electronic signature after receiving the Master Policy.
There are no major Servicer reporting requirement changes between National MI’s old Master Policy and the new Master Policy. The following are some key points regarding our Master Policy’s servicing reporting requirements:
- National MI is continuing to work with USMI, our industry trade group, on a standardized Mortgage Insurance Loan Activity Report (MILAR) reporting template and FAQs.
- MILAR reporting is intended to streamline the existing workout reports already submitted by lenders to their MI providers and will add performing loan reporting in support of the Master Policy requirements.
- Servicers will be expected to provide reports which include details on their entire insured portfolio including performing loans.
- National MI is flexible with implementation schedules and with the level of data that is required in these reports, and we will work with our customers to support these reporting requirements.
- Secure connections are available for exchanging these reports and information. Excel spreadsheets or pipe-delimited text files are the preferred formats.
- Established monthly default reporting is unchanged and must be submitted manually using forms/spreadsheets or electronically in an Automated Default Reporting (ADR) file.