Real estate data and technology company Lender Processing Services, Inc. has launched what it says is a new model for ordering private mortgage insurance.
LPS now allows lender customers to place automated orders for private mortgage insurance from a variety of carriers through its LPS Loan Quality Gateway, which is powered by LPS subsidiary RealEC Technologies.
The platform connects to more than 15,000 mortgage industry providers, now including several private mortgage insurance carriers such as United Guaranty, MGIC, Genworth, Essent Guaranty, Inc. and Radian, among others. Through the platform, lenders can access these carriers and order rate quotes, eligibility and rate quote checks, and mortgage insurance certificates.
The LPS Loan Quality Gateway is a "strategic component" of the company’s initiative to grow its origination technology, the Jacksonville, Fla.-based company said.
Fannie Mae and Freddie Mac require private mortgage insurance when borrowers are making down payments of less than 20 percent on a home purchase, or refinancing a home with a loan-to-value (LTV) ratio exceeding 80 percent.
"This new enhancement offers lenders more accurate, standardized and efficient selection of mortgage insurance, while helping them better meet the challenges of new regulations and requirements for overall loan quality," said LPS Chief Operating Officer Dan Scheuble in a statement.
"The new MI products offered through LPS are one more way we can help lenders and service providers work together toward a more transparent, data-centric loan origination process."
The new mortgage insurance offerings expand the platform’s loan origination services, which include appraisals; automated valuation models; title insurance; closing services; flood insurance; fee services; verifications of income, employment and identity; fraud prevention tools; loan quality analytics; and Valuation Insight, an appraisal evaluation tool that quickly identifies the overall quality of an appraisal, LPS said.
Automated orders also reduce processing time and result in fewer manual errors, the company added.
"By providing accurate, up-to-date rate and renewal information directly from each MI carrier, LPS’ MI products help lenders eliminate the cumbersome process of maintaining internal mortgage insurance rate tables, while reducing data-entry time and errors through the systemic delivery of data and documents," LPS said.
"The LPS Loan Quality Gateway can also manage a lender’s mortgage insurance vendor compliance rules, including best-fit formulas, and provide continuous access to MI carriers throughout the mortgage life cycle."
LPS’ new model offering access to several carriers comes at a time when the federal government is looking to put some of the mortgage insurance business provided by the Federal Housing Administration back in the hands of private mortgage insurers.
Starting on April 1, FHA will raise the annual mortgage insurance premium paid by borrowers on most new FHA loans by 10 basis points, or 0.1 percent, which the agency expects will add $13 a month to the average borrower’s monthly payments.
FHA will also increase premiums on jumbo mortgages (those $625,500 or bigger) by 5 basis points or 0.05 percent, to 155 basis points — the maximum currently allowed by law. Certain streamline refinance transactions will be excluded from the premium increases, the agency said.
Starting June 3, 2013, FHA will reverse a policy that automatically canceled required premium payments after loans reached 78 percent of their original value. Most FHA borrowers will have to continue paying annual premiums based on the unpaid principal balance for the life of their mortgage loan.