National MI Launches Rate GPS Risk-Based Pricing
Rate GPS will evaluate a variety of factors -- including credit scores, loan-to-value ratios, debt-to-income ratios and other borrower, loan, and lender characteristics -- to precisely calculate the appropriate mortgage insurance rates for individual loans. The new, granular risk-based pricing approach supports National MI's goals for maintaining capital strength, generating strong risk-adjusted returns, and bolstering the credit quality of its loan portfolio. Based on the company's current mix of business, Rate GPS represents an estimated overall rate reduction of less than 10%.
"Rate GPS aligns with our lender customers' desire for more targeted pricing and will ultimately enable lenders to structure their loans with more precision. We believe it will provide a more affordable option for borrowers," said
With Rate GPS, National MI leverages the modern analytical and modelling tools available through its state of the art IT platform to evaluate and assess historical loan data to produce rates that are closely calibrated to loan risks. The technology supporting Rate GPS is intended to deliver a smooth and seamless pricing process for lenders and their borrower customers.
"One of National MI's chief objectives is to help lenders open up homeownership opportunities for more borrowers sooner and more affordably, and Rate GPS has been designed to further that goal," Shuster said. "At the same time, our new risk-based pricing solution will help us effectively manage risk and quickly respond to changes in the market, which advances our equally important goal of delivering appropriate returns for our shareholders."
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