Arch MI offers informational resources to help lenders manage their compliance with industry regulations on mortgage insurance.
Qualified Mortgage (QM) Rule
Resources to Help You Better Understand the Qualified Mortgage Rule
On January 10, 2014, the Qualified Mortgage (QM) Rules issued by the Consumer Financial Protection Bureau (CFPB) took effect. Among these rules, there is a provision related to treatment of upfront mortgage insurance premiums and when those costs must be included in the rule’s 3% “points and fees test.” Private MI premiums paid by consumers after closing, such as Arch MI’s EZ Monthly product, are excluded from the points and fees test.
For further information on the QM rules, please refer to the following links from the CFPB:*
Products, Premiums, Fees and Points
|Single Premium** (Refundable/Non-Refundable)||Borrower-Paid||Included|
|Split Premium/Fees paid up front||Borrower-Paid||Included|
|Split Premium/Fees renewed monthly||Borrower-Paid||Excluded|
* Arch MI is providing internet links that may be useful in understanding QM requirements. However, Arch MI cannot ensure the continuing currentness or accuracy of the information on these third-party sites.
**The QM rule provides that the entire single premium, or a portion thereof, may be excluded from QM’s points and fees test if it is less than the FHA upfront premium, which is currently 175bps (amounts in excess of this must be included in the points and fees test), and is refundable on a “pro-rata”basis. The CFPB has not published any guidance as to the meaning of “pro-rata” related to single premium private MI. However, CFPB officials have indicated informally that “pro-rata” means that the “refund should be proportional to the amount of time remaining over the term of the policy.” In light of this statement, and given that Arch MI’s refund schedule is based on a 5 year term, we have classified our refundable single premiums and the upfront portion of our split premiums as included in the QM Points and Fees calculation.
The information included herein is not a legal opinion or legal advice. Lenders are cautioned to seek advice from their own legal counsel regarding the Qualified Mortgage requirements.
Private Mortgage Insurance Eligibility Requirements (PMIERs)
What are PMIERs?
The Federal Housing Finance Administration (FHFA) published final revised Private Mortgage Insurer Eligibility Requirements (“PMIERs”), which set the requirements that private Mortgage Insurers (MIs) must meet to be eligible to insure loans sold to or guaranteed by Fannie Mae and Freddie Mac (the “GSEs”). The PMIERs include new risk-based capital requirements for MIs.
Lenders, investors and other mortgage market participants can now have even more confidence in the value and financial strength of MI. With PMIERs finalized, the industry is positioned to be in the forefront of efforts to meet the important goal of putting more private capital at risk ahead of taxpayers, including by providing upfront risk sharing and deeper MI coverage for the GSEs.
What do the PMIERs mean for Arch MI and the MI industry?
Arch Mortgage Insurance Company (“Arch MI”), a leading provider of private mortgage insurance and a wholly owned subsidiary of Arch Capital Group Ltd., announced today that if the financial requirements for private mortgage insurers published today by the Federal Housing Finance Agency (“FHFA”) went into effect immediately, Arch MI would satisfy them.
The final Private Mortgage Insurer Eligibility Requirements (PMIERs) establish new standards that mortgage insurers are required to meet to insure loans sold to or guaranteed by Fannie Mae and Freddie Mac. Based upon our interpretation of the PMIERs and Arch MI’s current portfolio and balance sheet, Arch MI’s “available assets” exceed the ”minimum required assets” specified within the final requirements.
“We are pleased that FHFA has finalized the PMIERs and believe that setting this standard for the private mortgage insurance industry provides confidence in the value of mortgage insurance,” said David Gansberg, President and Chief Executive Officer of Arch MI. “Arch MI was in compliance with the draft PMIER financial requirements and we are proud to be fully compliant now with the financial requirements in their final form. This affirms our financial strength as an insurance counterparty. We are strongly positioned to continue to meet the needs of our customers.”
The PMIERs become effective December 31, 2015.
Tila-RESPA Integrated Disclosure (TRID)
Arch MI Makes TRID EZ
On this page, Arch MI provides you the information and resources you need to be prepared for the October 2015 launch of the CFPB’s TILA-RESPA Integrated Disclosure (TRID) rules, as well as important information on how mortgage insurance premiums should be disclosed under the TRID rules.
Mortgage Insurance and Tolerances under TRID
The disclosure of mortgage insurance under TRID depends, in part, on what kind of premium payment plan is selected for a Loan. Importantly, a change in the mortgage insurance premium on a loan using Arch MI’s EZ Monthly premium plan, in which premiums are paid in arrears, does not trigger a re-disclosure obligation under TRID after the Loan Estimate is sent to the borrower. With EZ Monthly premiums, you only need to re-disclose a change in the premium if you are sending a revised Loan Estimate for another reason. Of course, Arch MI offers a variety of mortgage of insurance premium plans other than EZ Monthly to meet your borrower’s needs, not all of which involve payment in arrears.
The following information and resources regarding the treatment of mortgage insurance premiums under the TRID rules were developed by Arch MI in conjunction with Benjamin K. Olson, a partner at the Buckley Sandler law firm. Mr. Olson is a former CFPB Deputy Assistant Director who led the CFPB’s development of the proposed rules and forms integrating TILA and RESPA disclosures. These materials are provided for informational purposes only and may not be relied on as legal advice.
- Webinar – Mortgage Insurance and Tolerances under TRID
- Q&A – Mortgage Insurance and Tolerances under TRID (PDF)
- Flowchart 1: How do I disclose Arch MI’s EZ Monthly mortgage insurance premiums on the Loan Estimate and Closing Disclosure? (PDF)
- Flowchart 2: Where should mortgage insurance premiums be disclosed on the Loan Estimate and Closing Disclosure? (PDF)
- Flowchart 3: When do I need to redisclose cost of mortgage insurance? (PDF)
- Flowchart 4: How do I disclose Arch MI’s RateStar Buydown mortgage insurance premiums on the Loan Estimate and Closing Disclosure? (PDF)
- MI and Tolerances Matrix (PDF)
A Readiness Roadmap for Originators
The TILA RESPA Integrated Disclosure changes are a chance to position yourself as an expert and share important information about the changes with your real estate partners. We’ve made it easy to educate your real estate partners with our sponsored Readiness Roadmap Webinar and downloadable presentation materials.
- 30 Days into TRID – What Do We Know Now? Webinar | Flyer (PDF)
- Webinar – TRID Readiness Roadmap for Originators
- Webinar – Becoming the Expert: Training and Educating Real Estate Agents on TRID Changes
- Presentation – TRID Readiness Roadmap for Originators (PDF)
- TILA RESPA Implementation Toolkit (PDF)
- Tips to Prepare for TRID (PDF)
- Possible Email Messages to Send to Real Estate Agents (PDF)
|Compliance guide (PDF)||A plain-language guide to the new rules in FAQ format that makes the content more accessible for industry constituents, especially smaller businesses with limited legal and compliance staff.|
|Guide to forms (PDF)||Provides detailed, illustrated instructions on completing the Loan Estimate and Closing Disclosure.|
|Closing factsheet (PDF)||An overview of the limited circumstances when changes to the loan require a new 3-day review.|
|Disclosure timeline (PDF)||Illustrates the process and timing of disclosures for a sample real estate purchase transaction.|
|Integrated loan disclosure forms & samples (PDF)||Downloadable Loan Estimate and Closing Disclosure forms in both English & Spanish and samples for different loan types.|
|Know Before You Owe – A Guide for Real Estate Professionals||A suite of web-based materials designed specifically for real estate professionals to understand the Know Before You Owe mortgage disclosure rule.|
Address Confidentiality Programs
Arch MI supports participants in state-sponsored Address Confidentiality Programs (PDF) (called “Safe at Home” in some states) and can accept applications from your borrowers who have a state-provided legal address to use as a substitute address for receiving mail.
These programs assist survivors of domestic violence, sexual assault, stalking or other crimes by providing them substitute addresses for their accounts to keep their actual physical addresses undisclosed.
If you have a new mortgage applicant and need to submit a request for insurance or an existing borrower who has notified you of their participation in a state-sponsored program, contact us at 1-877-642-4642.
Alternatively, you may submit notification and evidence of program participation (i.e., a state-provided program ID card or similar document) to us via email at [email protected].
If you need to notify us of a borrower’s “cancellation of” or “expiration of” their participation in an Address Confidentiality Program, use the contact number or email address provided above.