MI Policy Origination and Servicing Guide. Effective December 1, 2011

Transcription

1 Origination and Effective

2 Revision notes Revision notes for Section 3.4 A Home Affordable Refinance Program 2 Revision notes

3 Table of Contents and Servicing Descriptions 1 Introduction Insuring Mortgages, Ensuring the American Dream Data Security Radian Secure Sender...6 A. Registration...6 B. Phone Registration Originations General Requirements Borrower Qualification MI Commitment....8 A. Term...8 B. Activation...8 C. Post-commitment Data Changes...9 D. Resubmission Tolerance Radian Products...9 A. BPMI...9 B. Single Premium BPMI...9 C. LPMI...10 D. SplitEdge Technology Solutions A. MI Online Fast and Easy MI Ordering...10 B. B2B Connectivity System Integration Capabilities MI Application Submission A. Non-delegated...11 B. Delegated Commitment of Insurance A. Commitment Changes Activating Coverage A. Activating Coverage Non-deferred Payment Option...13 B. Activating Coverage Deferred Payment Option...13 C. Activating Coverage via MI Online for Deferred Payment Option...14 D. Activating Coverage via B2B Connectivity, Electronic Data Interchange (EDI) for Deferred Payment Option Servicing Technology Solutions A. MI Online Fast and Easy MI Servicing...15 B. B2B Connectivity System Integration Capabilities Changes to Certificates After Certification Loan Assumptions A. Assumptions with or without Release of Liability...16 B. Assumptions without Release of Liability...16 C. Assumptions with Release of Liability...16 D. Recent Default or Modification Loan Modifications A. Home Affordable Refinance Program...19 B. Home Affordable Modification Program (HAMP) C. Other Standard Delegated Loan Modifications for Non-performing Loans...20 D. Default Modifications Loan Sales/Transfer of Servicing.. 20 A. Assignability of Insurance Post Certificate Changes in Coverage Table of Contents

4 3.7 Partial Release Cancellation of Coverage/Refund of Premium/Balances Due A. Cancellation of Coverage...23 B. Refundable Payment Plans...24 C. Non-refundable Payment Plans Renewal Premium Billing and Payment...25 A. Premium Plan Types...25 B. Renewal Premium Billing...26 C. Billing Methods...26 D. Remittance of Premium...27 E. Billing Exceptions...29 F. Remitting the Renewal Payment...29 G. Premium Exceptions H. Premium Reminder Notices...30 I. Termination of Coverage for Non-payment...30 J. Payment File Discrepancies Reinstatement of Insurance Coverage A. Commitment Reinstatements...30 B. Certificate Reinstatements...31 Glossary...32 Appendix I Forms Assumption Request Side Assumption Request Side Notification of Mortgage Insurance Modification...38 Notice of Loan Sale and/or Request For Transfer of Servicing...39 Cancellation Request...40 Statement of Renewal Premiums Due Side Statement of Renewal Premiums Due Side Notice of Termination for Non-payment of Premium...43 Reminder Notice Sample...44 Appendix II Short Rate Cancellation Schedule Short Rate Cancellation Schedule Annual Premium Plans...46 Short Rate Cancellation Schedule Single Premium Plans...47 For more information, please contact: Table of Contents

5 and Servicing Descriptions 5

6 1 1.1 Introduction Insuring Mortgages, Ensuring the American Dream Mortgage Insurance is a type of insurance coverage that protects lenders or investors against losses resulting from the borrower s default of a mortgage loan. Lenders, loan servicers and Radian have an important common interest all parties want timely, accurate and efficient origination and servicing processes. Our MI products help lenders reduce risk and enable consumers to become homeowners sooner. Our innovative MI submission options make doing business with Radian more efficient. Our streamlined servicing procedures and accessible updated forms are designed to meet current needs while assuring the fastest response possible. This guide is dedicated to providing easy instructions regarding processes associated with flow originations and servicing for all Radian-insured loans. Please refer to for our complete underwriting guidelines. 1.2 Data Security Radian is committed to protecting confidential information. We protect Non-public Personal Information (NPI) through several internal mechanisms that include secure . Radian s Secure Sender encryption service is available for lenders and servicers. Regardless of technology employed, Radian encourages all customers to use caution, appropriate prudence, and secure methods when sending confidential information to Radian. 1.3 Radian Secure Sender The Radian Secure Sender is an encrypted delivery solution that provides lenders with a reliable and private exchange of secure s and files containing confidential, proprietary and NPI with Radian. There are two options to register for Radian s Secure Sender: A. Registration Once you receive an from Radian s Secure Sender, click on the View Message link and you will be taken to the Radian Secure Sender registration page where you may set up your username and password. 6 Introduction Insuring Mortgages / Data Security / Radian Secure Sender

7 B. Phone Registration When you register for Radian s Secure Sender by phone, you will receive an message in your inbox that includes a link from Radian. Click on the link and you will be taken to the Radian Secure Sender registration page where you may set up your username and password. Please contact Radian s Customer Care Department, which is open from 8 AM to 8 PM Eastern Standard Time (EST), Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz for further assistance. 7 Introduction Radian Secure Sender

8 2 2.1 Originations General Requirements All MI applications submitted to Radian must be supported in the submitting lender s file with complete documentation at the time of application. For complete Underwriting Guidelines and Radian MI Rate cards, please visit or contact Radian s Customer Care Department, which is open from 8 AM to 8 PM EST, Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz, or contact your Radian representative. Radian s MI underwriters retain the right to exercise prudent risk underwriting and to modify or decline a mortgage insurance request based on the overall risk profile. Radian, however, would appreciate the opportunity to work with lenders on any loan that they believe is an insurable risk. 2.2 Borrower Qualification Radian insures mortgage loans to natural persons only, with the exception of living/ inter-vivos trusts where a Trustee has supplied a Social Security number. Radian does not provide mortgage insurance if borrowers are corporations, partnerships or limited partnerships (limited liability corporations [LLCs]). A borrower with diplomatic immunity is ineligible as are loans to borrowers having an Individual Tax Identification Number (ITIN) in lieu of a Social Security number. Corporate and business tax identification numbers are unacceptable as a substitute for Social Security numbers. 2.3 MI Commitment A. Term 1) MI commitments are issued by Radian with a commitment term of 120 days. 2) Commitment expiration dates cannot be extended. 3) Commitments are issued based on Radian s guideline and rate eligibility requirements. Borrower Paid Mortgage Insurance (BPMI) must be submitted prior to the loan closing/funding date and Lender Paid Mortgage Insurance (LPMI) must be submitted prior to the first payment due date. B. Activation MI commitments must be activated (i.e., loans must be certified) before the commitment expires. Activation can be accomplished in one of two ways: 8 Originations General Requirements / Borrower Qualification / MI Commitment

9 Report to Radian the date on which the loan closed (mortgage settlement date) with payment of initial premium, and if applicable, the upfront premium due, and satisfaction of any open conditions; or When the deferred premium payment option is chosen, satisfy any open conditions and report to Radian the date on which the loan closed. C. Post-commitment Data Changes 1) A loan must re-qualify for an MI commitment if any information changes prior to the loan closing, if the information would impact the loan s qualification for MI or the terms under which the commitment was issued. 2) Subsequent qualification is based on current published guidelines at the time of re-qualification. It is not based on the guidelines published at the time of the original MI application or commitment. 3) An MI commitment shall be rendered null and void if changes to the loan information results in an ineligible transaction as identified by either Radian or the lenders. D. Resubmission Tolerance In the event the borrower discloses or the lender discovers additional debt(s), the loan will not require requalification if: The debt-to-income (DTI) ratio does not exceed the lower of published guidelines or 45% and the DTI ratio increase is < or = 3%. A new credit report is obtained and the representative credit score continues to meet published guidelines. In all cases, any change to the loan file must be documented on a revised 1003 provided prior to certification. 2.4 Radian Products Radian offers the following mortgage insurance products: A loan to a borrower without a FICO score, qualified using non-traditional credit, is not eligible for single premium or SplitEdge. A. BPMI BPMI is paid by the borrower. Premium plan types may be monthly, annual or single. B. Single Premium BPMI Borrowers can pay a one-time lump sum payment at closing, or if they do not have sufficient funds, the one-time sum may be financed under certain circumstances. 9 Originations MI Commitment / Radian Products

10 C. LPMI LPMI is similar to BPMI, except that it is paid for by the lender. The cost to the lender of the MI premium is built into the interest rate charged on the loan. Premium plan types may be monthly, annual or single. D. SplitEdge Radian s SplitEdge (only available for Borrower Paid Mortgage Insurance [BPMI]) splits the MI cost into an upfront premium and a smaller monthly renewal, dramatically reducing the borrower s monthly MI payment, which can help borrowers qualify for a larger loan or better manage their monthly payments. 2.5 Technology Solutions A. MI Online Fast and Easy MI Ordering Ordering MI with Radian is easy when you use MI Online, our self-service Web based MI ordering application. By using MI Online to support your MI Origination needs, you can: Obtain an MI commitment in a matter of seconds. Review a loan for eligibility. Upload a non-delegated loan file submission. Manage an MI application within any stage of Application Entry. Import a Fannie Mae Desktop Underwriter (DU) data file to speed your MI Order data entry. Print or fax MI commitments. Obtain a customized rate quote. Retrieve, update and resubmit MI applications for revised commitments. Activate deferred monthly commitments to place insurance in force. B. B2B Connectivity System Integration Capabilities More than 90% of our MI requests are received and acknowledged through some form of Electronic Data Interchange (EDI). We support the MISMO guidelines and we have access to implementations for a range of MISMO versions for MI transactions to help you deliver MI and underwriting data securely and conveniently. We can also help you define custom file formats upon request. Supported MI Origination transactions include: Ordering of MI Requesting rate quotes Query an existing MI Order 10 Originations Radian Products / Technology Solutions

11 Supported Protocols and Connectivity Models include: Synchronous Asynchronous Web service Inquiry Post-back For more information regarding System Integration Capabilities, please contact Radian s Customer Care Department, which is open from 8 AM to 8 PM Eastern Standard Time (EST), Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz. 2.6 MI Application Submission Radian offers multiple options for submitting MI applications for both delegated and non delegated lenders. To obtain an MI application, please contact Radian s Customer Care Department, which is open from 8AM to 8 PM Eastern Standard Time (EST), Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz. A. Non-delegated Non-delegated lenders may submit MI applications in any one of the following ways: 1) Electronic Upload using Radian s MI Online data transmission system 2) Requests Please send to Radian s Service Center via secured to intake@radian.biz. For lenders who do not have secure , Radian provides secure via Secure Sender. Please contact customercare@radian.biz for assistance. 3) Fax Requests Please fax to Radian s Service Center at ) Overnight delivery Packages may be sent to: Radian Guaranty Inc. Service Center 250 East Wilson Bridge Road, Suite 175 Worthington, OH B. Delegated Lenders who have been granted delegated underwriting authority through the receipt of a Radian-issued Delegated Underwriting Authority Endorsement are expected to employ prudent judgment when exercising their delegated underwriting authority and diligently underwrite all loans prior to ordering MI. 11 Originations Technology Solutions / MI Application Submission

12 Delegated commitments may be obtained through one of the following methods: 1) Radian s MI Online data transmission system 2) EDI Transmission B2B Connectivity: System Integration Capabilities 3) The Radian Service Center by providing: A completed, signed form 1008, with the FICO-based credit score clearly noted. A completed Radian MI Application identifying the submitting lender, coverage requested, and Automated Underwriting System (AUS) response, if applicable. For fax, , and postal delivery instructions, please refer to the Non-Delegated MI Application submission instructions on page 11 of this guide. The use of Radian s MI Online system, EDI transmission methods, and Service Center submission options: Does not relieve the lender of any representations/warranties associated with their Radian delegated underwriting authority. Requires the lender to adhere to Radian s published guidelines. 2.7 Commitment of Insurance When an MI application has met the necessary eligibility requirements, Radian will issue a commitment. This single document sets forth the terms and conditions under which the Company will extend insurance coverage for a mortgage loan. A. Commitment Changes Commitment changes may be requested as follows: 1) Changes to existing MI commitments that were ordered through Radian s Service Center can only be made by contacting Radian s Customer Care Department, which is open from 8 AM to 8 PM Eastern Standard Time (EST), Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz. 2) To request a change to an existing Commitment of Insurance ordered through Radian s MI Online system, the lender may: Access the commitment via MI online Go to Order MI Input the Radian application number Make the required change(s) and resubmit; or Contact Radian s Customer Care by phone at 877 Radian 1 ( ) or to customercare@radian.biz. 12 Originations MI Application Submission / Commitment of Insurance

13 3) To request a change to an existing Commitment of Insurance ordered through B2B Connectivity, the lender may: Resubmit the application via the same EDI channel. This option may not be available for all integrations, please contact Radian s Customer Care Department, which is open from 8 AM to 8 PM Eastern Standard Time (EST), Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz. 2.8 Activating Coverage A. Activating Coverage Non-deferred Payment Option Upon approval of the MI application, Radian will issue a Commitment of Insurance reflecting the terms and conditions of approval. Upon closing the loan, lenders may activate coverage by satisfying any open MI conditions, remitting the designated initial premium and/or upfront premium (if applicable), and providing the closing date on the Commitment of Insurance. Coverage will become effective as of the loan s closing date. Please remit to: Radian Guaranty Inc. P.O. Box Philadelphia, PA ATTN: Premium Processing B. Activating Coverage Deferred Payment Option* (excludes programs that require an upfront premium) Radian s Deferred Monthly Program requires no initial MI premium at closing, making homeownership more affordable for borrowers and simplifying closing and servicing for lenders. The lender must indicate the deferred option on the monthly insurance application. Upon closing the loan, the lender may activate coverage by satisfying any open MI Conditions and provide the closing date on the Radian Commitment of Insurance. Coverage will become effective as of the loan s closing date. Lenders may send the updated commitment: By customercare@radian.biz By fax: By mail: Radian Guaranty Inc Market Street, 6th Floor Philadelphia, PA ATTN: Premium Processing * Do not send the premium at this time. Renewal billing will begin as of the next billing cycle after receipt of closing date. Also, Radian will collect the deferred month premium at the time of MI cancellation. 13 Originations Activating Coverage

14 C. Activating Coverage via MI Online for Deferred Payment Option (excludes programs that require upfront premium) MI Online s Activate Deferred feature allows lenders to activate coverage on deferred loans upon request. MI Online offers secure access 24 hours a day, 7 days a week. For additional information, please see the MI Online section of this guide or contact Radian s Customer Care Department, which is open from 8 AM to 8 PM Eastern Standard Time (EST), Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz. D. Activating Coverage via B2B Connectivity, Electronic Data Interchange (EDI) for Deferred Payment Option (excludes programs that require upfront premium) Obtain instant certification wherein MI requests are received and acknowledged through some form of EDI. EDI s Activate Deferred feature allows lenders to activate coverage on deferred Loans, provided that a past closing date is included in the EDI message. For additional information, please see B2B Connectivity section of this guide or contact Radian s Customer Care Department, which is open from 8 AM to 8 PM EST, Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz. 14 Originations Activating Coverage

15 3 3.1 Servicing Technology Solutions A. MI Online Fast and Easy MI Servicing Completing service related tasks and managing claims is fast, easy and convenient when using MI Online, our self-service, Web-based MI servicing and claims management portal. By using MI Online to support your MI Servicing needs, you can: View up-to-date records of premium payment Obtain an MI certificate in a matter of seconds Transfer MI servicing Cancel MI policies Change loan numbers Submit an initial claim requests Check the status of one or more claim requests View and download Explanation of Benefits (EOB) B. B2B Connectivity System Integration Capabilities We support a variety of industry standards including MISMO and have implementations to help you deliver and complete MI service related processes securely and conveniently. We can also help you define custom file formats upon request. Supported MI Servicing transactions: MI cancellations Servicing transfers Loan boarding Default reporting Claims submission Billing and premium payments For more information regarding System Integration Capabilities, please contact Radian s Customer Care Department, which is open from 8 AM to 8 PM EST, Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz. 3.2 Changes to Certificates After Certification At times, lenders may need to change the terms of a Certificate after insurance coverage has become effective. In many cases, after reviewing and approving a request, Radian will issue a replacement Certificate of Insurance or Certificate of Insurance Endorsement reflecting the change. Below are some of the changes that may be requested. 15 Servicing Technology Solutions / Changes to Certificates After Certification

16 3.3 Loan Assumptions Radian considers an assumption to be a change in ownership of property, wherein the assuming borrower agrees to accept liability for payment of the existing mortgage. An individual liable for repayment of the underlying obligation of a mortgage agreement is the Obligated Mortgagor. There are two types of assumptions: assumptions with release of liability, in which the Obligated Mortgagor is released from liability; and assumptions without release of liability, in which the Obligated Mortgagor remains liable for repayment. Loan assumptions with or without release of liability of the Obligated Mortgagor require prior approval by Radian. A. Assumptions with or without Release of Liability The following requires limited credit qualification of the assuming borrower: 1) The assuming borrower is currently on the property s title but is not a relative of the Obligated Mortgagor. 2) There is evidence that the assuming borrower has occupied the subject property for the past 12 months and will continue to occupy the property as their primary residence. 3) There is evidence that the assuming borrower has paid the required monthly mortgage payment for the past 12 months and all payments have been paid as agreed. 4) All MI certificates previously issued in the name of the assuming borrower are in good standing. B. Assumptions without Release of Liability The following does not require credit qualification of the assuming borrower and may be approved subject to meeting the following eligibility requirements: 1) The assuming borrower currently occupies the subject property as their primary residence, and a) The assuming borrower is a relative of the Obligated Mortgagor; or b) The assuming borrower has been awarded sole title to the subject property by the way of: A court order; or Inheritance (in the case where the Obligated Mortgagor is deceased) C. Assumptions with Release of Liability All other requests including a release of liability require: 16 Servicing Loan Assumptions

17 1) Credit qualification of the assuming borrower as follows: Minimum 680 credit score Maximum 45% debt to income (DTI) OR Maximum 50% DTI with evidence of an equal or higher housing expense paid as agreed for twelve months and a minimum of six months reserves. The assuming borrower currently occupies or will occupy the subject property at the time of assumption. All MI certificates previously issued in the name of the assuming borrower are in good standing. 2) The assumption package must include the following documentation: Completed form 1003 Current credit report Current income documentation (30-day paystub and recent year W2 or tax return as applicable) Current asset documentation 3) Additional documentation specific to the following circumstance is required when: a) Inheritance/Division of Equity i) The property is involved in probate; or ii) Inherited by more than one party; or iii) One of the Obligated Mortgagor(s) is released from liability and receives proceeds resulting from divided equity in the subject property: The terms of ownership must be disclosed and the assuming borrower must provide evidence of financial ability to meet the terms of the agreement. Execution of a quitclaim deed. b) Purchase of the subject property by the assuming borrower i) A complete copy of the purchase agreement disclosing all terms of the sale needs to be provided in this instance. ii) The assuming borrower must provide evidence of financial ability to meet the terms of the sale agreement. iii) An adequate collateral value assessment (current automated valuation model [AVM], Broker s Price Opinion [BPO]), legal document or appraisal) that supports the sales price must be provided. The assumed LTV may not exceed the initial LTV at the time of certification. iv) Execution of a warranty or grant deed. D. Recent Default or Modification If a mortgage associated with an active certificate has been in default or has received a modification within the past six months, the following conditions apply: An explanation of the circumstances surrounding the default and/or modification is required in addition to the reason for adding the assuming borrower. The loan must be current at the time of assumption. 17 Servicing Loan Assumptions

18 The request is not eligible for a release of liability. The assuming borrower must occupy or intend to occupy the subject property. To request an Assumption, please complete an Assumption Request form (a sample of this form may be found on page 36) and include this form with the Assumption package, which may be: ed to: Radian s Service Center at intake@radian.biz; Faxed to: Radian s Service Center at ; or Mailed to: Radian Guaranty Inc. 250 E. Wilson Bridge Road, Suite 175 Worthington, OH ATTN: Service Center To complete our Assumption Request form online, please go to Please contact our office by calling Your request will be processed within 3 business days of receipt. 3.4 Loan Modifications A Loan Modification is a permanent change or alteration to the existing terms of a mortgage. A summary of each program is listed below. For more detailed information on Radian s loan modification policies, procedures and guidelines, please reference our website at or please contact our Loan Modification Team at certmods@radian.biz. Radian loan modification guidelines and programs support the following: Homeowner Affordability and Stability Plan (HASP) initiatives, which are part of a comprehensive strategy to reinforce the U.S. economy by helping millions of homeowners modify or refinance their mortgages to avoid foreclosure. Home Affordable Refinance Program (HARP) for performing loans - Same Servicer HARP refinances - New Servicer HARP refinances Home Affordable Modification Program (HAMP or HMP) for non-performing loans. Other Standard and Default Loan Modifications for Non-performing Loans designed for homeowners at risk of foreclosure. Default Modifications for either defensive or imminent default modifications. 18 Servicing Loan Assumptions / Loan Modifications

19 A. Home Affordable Refinance Program In support of the HARP initiative, Radian offers, to current Radian Master Policy holders, the HARP eligible Modification Program. This program combines Radian s previous Same Servicer Modification Policy and New Servicer Refinance Policy into one program re-designed to accommodate requests from both same and new servicers. It facilitates the refinance of a performing loan by extending current mortgage insurance coverage to the new HARP refinance loan. Requests for a Certificate of Insurance Endorsement for Loan Modification can be submitted via the Notification of Mortgage Insurance Modification form or the HARP Performing spreadsheet. These files can be downloaded as attachments from our website at the following link: The form or spreadsheet can be submitted to the Loan Modification Team by to certmods@radian.biz. Once the request is received with the completed pre-close data elements, Radian will return to the requestor a Letter of Intent that will reference the original certificate number, borrower information, new loan number, new loan amount, existing coverage percentage, and new premium based on the new loan amount. The information contained in this Letter of Intent can be used to close the HARP refinance loan. Any requests to change the pending refinance (i.e., update the loan amount, loan number, new interest rate, etc.) should be ed to certmods@radian.biz or call Customer Care at to speak with a specialist. Radian s approval of the modification relies strictly on the Insured/Servicer s representation that the new loan has been underwritten, approved and closed in compliance with all applicable HARP underwriting guidelines and program requirements. Radian will not accept HARP loan packages for underwriting review. Once the loan has closed, notify Radian by re-submitting the Notification of Mortgage Insurance Modification form or the HARP Performing spreadsheet with the required post closing data elements and signed lender certification. Once this has been received and upon request, Radian will return, to the requestor, the Certificate of Insurance Endorsement for Loan Modification. Please see Radian s website for the required form and program details. B. Home Affordable Modification Program (HAMP) Radian provides delegated authority for this program via an agreement with the GSE s. The modification must meet all guidelines/requirements under the applicable GSE HAMP policy. 19 Servicing Loan Modifications

20 HAMP Submission Procedures For more detailed policy guidelines, please see applicable GSE policies and guidelines. For your convenience, you may access links to the applicable GSE programs on our website at: Please submit the MICA Spreadsheet or Notification of Mortgage Insurance Modification Form to to report all of the HMP modification steps. This form can be found at the same link. C. Other Standard Delegated Loan Modifications for Non-performing Loans Radian defines a non-performing loan as one that is currently in default or in imminent risk of default, based on the Net Present Value (NPV) waterfall identified by the Treasury Department. For more detailed policy guidelines and links to the applicable GSE programs, please refer to our website at: Other Standard Delegated Loan Modification for Non-performing Loans Submission Procedures Please submit the Notification of MI Modification form to certmods@radian.biz. The form is located on our website at: D. Default Modifications Defensive or Imminent Default Modifications For complete detail of policy and procedures regarding the default (defensive or imminent default) modifications, please refer to Radian s Default and Claims on our website at: Loan Sales/Transfer of Servicing The steps to follow regarding in-force policies related to a Loan Sale or Transfer of Servicing are listed below: A. Assignability of Insurance 1) Radian does not restrict the assignment of insured loans, however, servicing may be transferred only to a Radian-approved servicer. A transfer of servicing to a servicer not approved by Radian may jeopardize the insurance coverage. To become a Radian-approved servicer, please contact Customer Care at 877 Radian 1 ( ), which is open from 8 AM to 8 PM EST, Monday through Friday, or customercare@radian.biz and request an application. To confirm that a transferee is Radian-approved, call Customer Care at the above-listed number. 20 Servicing Loan Modifications / Loan Sales/Transfer of Servicing

21 2) The selling lender should promptly notify Radian of the Loan Sale/Transfer of Servicing, which can be done in the following ways: EDI 266 transaction X is a transaction that allows Radian s loan servicers to electronically process loan sale/transfer of servicing information. For more information, please contact Radian s Customer Care Department, which is open from 8 AM to 8 PM EST, Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz. MI Online allows you to process the transfer of servicing information from your desktop PC. Send a completed Transfer of Servicing form (or any other format containing the same information as provided on our Notice of Loan Sale and/or Request For Transfer of Servicing form on page 39) by: customercare@radian.biz Fax: Mail: Radian Guaranty Inc Market Street, 6th Floor Philadelphia, PA To complete our Notice of Loan Sale and/or Request for Transfer Servicing form online, please go to: 3) Upon request, Radian will issue an endorsement to the Certificate of Insurance to the buyer of the loan. The endorsement will acknowledge the transfer (with or without a loan sale) and establish continued coverage on the assigned loan. In the case of a servicing transfer only, Radian will issue an endorsement that will state, Acknowledgment of Servicer Change Only. 4) Renewal premium notices will be sent to the servicer indicated on the loan sale notice. If the renewal premium is past due at the time Radian is notified of the Loan Sale or Transfer of Servicing, the endorsement will indicate the amount of premium that is due. 5) Purchasers of mortgages should be sure to receive a Certificate of Insurance Endorsement evidencing the Loan Sale or Transfer of Servicing and that coverage is in force. 21 Servicing Loan Sales/Transfer of Servicing

22 3.6 Post Certificate Changes in Coverage At times, it may be necessary for a lender to request a change in terms of coverage, payment plan, or loan characteristics. Requests to change the terms of coverage, payment plan, and payment terms should be submitted to Radian s Customer Care Department. Depending on the request, the servicer may be asked to provide supporting documentation. A change to any loan characteristics such as loan amount, closing date, appraised value, or LTV should be reported immediately. Certain changes may require further review to confirm eligibility and/or impact to pricing. All requests will be reviewed and Radian will communicate the decision to the requestor. It is Radian s sole discretion whether to approve the requested change. If the change results in an increase in premium, receipt of the additional premium is required before the change is finalized. The additional premium must be received within 30 days or the requested change will not be made. Radian will not grant refunds after 6 months from the certificate effective date. If a refund is due, Radian will issue the refund to the servicer of record. To request or report a change, please contact Radian s Customer Care Department, which is open from 8 AM to 8 PM Eastern Standard Time (EST), Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz. 3.7 Partial Release Radian must approve a partial release before the borrower may sell any portion of their mortgaged premises. To obtain approval, submit the borrower s request in writing to Radian along with the following items: current appraisal or BPO (broker s price opinion), estimated value of the parcel being released, copy of appraisal from origination, survey of the premises, 12-month payment history, and dollar amount of any consideration being paid. This information can be mailed to Radian Guaranty Inc., 1601 Market Street, Philadelphia, PA , ATTN: Legal Dept. 11th Floor. You may also this information to customercare@radian.biz or call Radian at 877 Radian 1 ( ) 3.8 Cancellation of Coverage/Refund of Premium/Balances Due Occasionally, it becomes necessary for the Servicer to cancel Radian insurance coverage because the loan has been paid off or the LTV ratio has decreased to a level at which insurance is no longer needed. 22 Servicing Post Certificate Changes in Coverage / Partial Release / Cancellation of Coverage

23 A. Cancellation of Coverage 1) To expedite processing, requests for cancellation must be received by Radian within three months of the loan payoff or waiver date. Any request that is received more than three months after the payoff or waiver date will be processed using a cancellation effective date of three months to the date of the request. Refunds, if applicable, will be calculated using this date. 2) To request a cancellation with an effective date more than three months prior to the date of the request, please contact Radian Customer Care, which is open from 8 AM to 8 PM EST, Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz. 3) Lenders can notify Radian of cancellations in one of the following ways: EDI 266 transaction X is a transaction that allows Radian s loan servicers to electronically process an MI cancellation. For more information, please contact Radian s Customer Care Department, which is open from 8 AM to 8 PM EST, Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz. MI Online allows you to process an MI cancellation from your desktop PC. Send a completed Cancellation Request form (or any other format containing the same information as provided on our Cancellation Request form on page 40) by: customercare@radian.biz Fax: Mail: Radian Guaranty Inc Market Street, 6th Floor Philadelphia, PA ATTN: Premium Processing To complete our Cancellation Request form online, please go to: 4) Radian will collect the deferred month (if applicable), renewal premium and premium tax/assessment at time of cancellation. Cancellation can result from a loan paying in full, submission of a claim or other action by Radian or the insured. If at the time of claim, the deferred premium, renewal premium and premium tax/assessment is outstanding, all or a combination will be netted from the claim payment. 5) Radian monitors single premium certificates for pay-off. If a search of public records indicates the mortgage loan has paid in full, Radian will provide the servicer with notice of our intent to cancel the associated MI coverage. Unless notified by the servicer that the loan remains active within 60 days of receipt of Radian s notice, the MI coverage will be cancelled. The servicer response must include the amount of unpaid principal balance. 23 Servicing Cancellation of Coverage/Refund of Premium/Balances Due

24 B. Refundable Payment Plans 1) Radian will issue refund checks made payable to the servicer of record, the borrower or both, in accordance with the servicer s request. 2) Should the refund amount equal zero, Radian will notify the servicer that coverage is cancelled and that the refund amount is zero. 3) Refunds in amounts less than $2.00 will only be made at the lender s specific request. 4) The servicer is responsible for any outstanding premium due. Radian will bill the lender for payments due. 5) Annual or single premium payment plan refunds are calculated based on the applicable short rate cancellation schedule. Radian retains a minimum premium of $50.00 on initial coverage and $10.00 on renewal coverage. Radian s Short Rate Cancellation Schedule may be found in Radian s Master Policy and it is also provided on page 46 and 47 of the Origination and for your convenience. 6) Monthly Coverages When a notice of cancellation is received for an MI certificate with refundable rates, a prorated refund, if due, will be sent to the servicer (unless instructed otherwise by the servicer). The proration will be based on the actual number of days the policy was in force. All cancellation refunds are mailed in accordance with the requirements of the Homeowners Protection Act (HPA). C. Non-refundable Payment Plans 1) When notified, Radian will acknowledge to the servicer that coverage is cancelled. 2) Annual Payment Plans Radian will notify the servicer that no refund of premium is due. Calculation will utilize Radian s Short Rate Cancellation Schedule which is contained within Radian s Master Policy and is also provided on page 46 and 47 of the for your convenience. 3) Monthly Payment Plans In some cases, a premium may still be due when Radian receives a request for cancellation of coverage on a loan insured by Radian s monthly non-refundable plan. The servicer is responsible for any outstanding premium due plus the premium for the month in which the payoff/waiver occurred. Radian will bill the lender for outstanding payments. For borrower paid accounts, Radian will issue a refund of premium (if applicable) if the cancellation meets LTV ratio requirements as set forth in the Homeowners Protection Act. Servicers must indicate the cancellation reason when submitting the cancellation request. 24 Servicing Cancellation of Coverage/Refund of Premium/Balances Due

25 4) Single Premium Payment Plan This premium is non-refundable. Premiums will only be refunded when coverage is cancelled under the Homeowners Protection Act. Upon cancellation, loan terms greater than 25 years will be calculated using Radian s 15-Year Short Rate Cancellation Schedule. Loan terms 25 years or less will be calculated using Radian s 5-Year Short Rate Cancellation Schedule. The Short Rate Cancellation Schedule may be found in Radian s Master Policy and is also provided on page 46 and 47 of the for your convenience. 3.9 Renewal Premium Billing and Payment Radian offers a variety of plan types and renewal billing methods. A. Premium Plan Types 1) Constant Premium Plans The premium is calculated based on the original loan balance. The premium rate remains the same for each renewal until the eleventh-year anniversary. The Constant Premium Plan is offered on both Monthly MI and Annual MI premiums. 2) Declining Premium Plans The premium rate is constant, however the premium is calculated based on the current loan balance provided by the lender with the regular remittance: a) Declining Options: i) Monthly Each renewal premium is based on the current monthly outstanding loan balance. ii) Monthly at Anniversary The first-year premium is based on the original loan balance. Thereafter, the premium is based on the outstanding loan balance at each anniversary date. iii) Annual The initial premium is based on the original loan balance. Thereafter, the premium is based on the outstanding loan balance at each anniversary date. 3) Single Premium Plans A one-time premium is due to activate coverage. The servicer must remit the premium and supply the closing date before the mortgage commitment is activated and coverage is in-force. 4) Deferred Option A deferred commitment can be either constant or declining. Deferred commitments are activated without receipt of the initial premium. The closing date must be provided by the servicer to activate the MI coverage. This option applies to borrower paid monthly policies only. 5) Upfront Premium In addition to the monthly premium, a one-time upfront premium is required to activate coverage. This plan applies to monthly, SplitEdge policies only. 25 Servicing Cancellation of Coverage/Refund of Premium/Balances Due / Renewal Premium Billing and Payment

26 B. Renewal Premium Billing Radian issues renewal bills monthly. These bills include both Annual and Monthly renewals. Certain states assess a tax on MI premiums. Where applicable, the tax/ assessment is included on the billing statement. Please be sure to include the tax/ assessment with your premium payment. 1) Annual The renewal date is determined by the Certificate Effective Date. The renewal payment is due one year from the Certificate Effective Date and each year thereafter. This is called the Certificate Renewal Effective Date. If the policy qualifies for a HARP Same Servicer loan modification, the Loan Modification Date is used in lieu of the Certificate Effective Date. Subsequent renewals will be due one year from the Loan Modification Date and each year thereafter. 2) Monthly The renewal is billed monthly and is typically for the current month only. However, if the prior month premium is not received, the renewal bill will reflect multiple months, including the premium due for the prior month(s). Past due premiums should be paid current to prevent termination of coverage. a) Monthly Deferred The first month s premium is billed one month after the certificate effective date. Renewals are billed every month thereafter in the same manner as monthly certificates. b) Free After Five Certificates in this program are billed in the same manner as monthly certificates, however, certificates may qualify for billing termination after 60 months. Radian initially reviews Certificates under the Free After Five program after month 58 or 2 months prior to the billing termination date. Please contact Radian s Customer Care Department, which is open from 8 AM to 8 PM EST, Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz if you have any questions. C. Billing Methods Radian provides renewal bills in either paper or automated format. 1) Statement of Renewal Premiums Due The statement is mailed to the servicer at the first week of each month. The statement lists the servicer s name, identification number and certificates along with the month and premium due. Radian s paper billing statement includes all open items. This statement will include past due premiums as well as premiums due for the current month. A copy of the Statement of Renewal Premiums Due can be found on pages 41 and 42. Servicers wishing to transition from paper to automated format should contact Radian s Customer Care Department, which is open from 8 AM to 8 PM EST, Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz. 26 Servicing Renewal Premium Billing and Payment

27 2) Automated Billing Statement In lieu of a paper statement, Radian can provide the monthly billing statement in electronic format. Secure FTP, FTP with PGP encryption or secure should be used to facilitate the transfer of billing and payment files. Radian supports the various industry standard file formats or Radian can provide an Excel-based template. To protect your data, an Excel-based bill is sent via using the Radian Secure Sender. The Radian Secure Sender is an encrypted solution that provides a reliable method to exchange s files containing confidential, proprietary or NPI (non-public information). Typically, the MI bill is issued on the first week of the month. However, a servicer can request an alternate billing date using the automated billing statement. The option to choose a billing date allows the servicer to coordinate the MI bill with the servicer s payment schedule and can reduce billing exceptions. Radian s automated bill also lists all open items. These items includes past due premiums as well as premiums due for the current month. To prevent past due items from appearing on the statement, the prior months premium should be received at least five business days prior to the next scheduled bill date. New clients are set up to receive an Automated Billing Statement. This paperless billing alternative is an Excel-based invoice delivered via secure . To ensure timely and accurate billing, new clients should complete the Billing Invoice Contact section of the Master Policy and Delegated Authority request form. D. Remittance of Premium 1) Statement of Renewal Premiums Due a) Level or Constant Renewal Premiums i) Remit the amount due as shown on the renewal statement. b) Annual Declining Renewal Premiums i) Record the current loan balance on the statement. To calculate the premium due, multiplying the balance by the premium rate. c) Monthly Declining Renewal Premiums i) Some premiums decline monthly based on the current loan balance. Record the current loan balance on the statement. To calculate the premium due, multiply the loan balance by the premium rate and divide the total by 12. ii) Some monthly premiums decline once each year on the Certificate Anniversary Date. Record the current loan balance. At the anniversary date only, calculate the new premium by multiplying the balance by the premium rate and dividing this total by Servicing Renewal Premium Billing and Payment

28 Calculate the total premium, tax due and remit payment for both along with a copy the revised Billing Statement. If alternate remittance advice is provided it must include: The Radian Certificate Number The current loan balance The premium due Taxes due, if applicable Upon receipt of the bill, the servicer should verify the certificate information. If any discrepancies are noted with regard to the premium rate or plan type, please notify Radian s Customer Care Department, which is open from 8 AM to 8 PM EST, Monday through Friday, at 877 Radian 1 ( ) or customercare@radian.biz. Loan number corrections, servicing transfers and cancellations can be noted on the bill and returned with your payment. If you are indicating the servicing was sold, please be sure to provide the name and address of the new servicer. Cancellations should always include the effective date of the cancellation. Please note that servicing transfers, cancellations and loan number changes can also be submitted via Radian s MI Online Web-based application. This self-service application allows a servicer to make real-time certificate changes, which eliminates the dependency on paper processing and avoids billing exceptions that may result from a delay in processing a paper-based request. If you are interested in MI Online, visit to sign up for your own username and password using our automated user request functionality or call Radian s Customer Care Department at 877 Radian1 ( ). 2) Automated Billing Statement In response to the automated bill, the servicers disbursement process creates a payment file. The payment file should be returned to Radian along with the total premium and tax due. Secure FTP, FTP with PGP encryption or secure should be used to facilitate the transfer of billing and payment files. Radian supports the various industry standard file formats. If you received your bill in MS Excel format, the bill will include an Excel template for your remittance. The template provides the data fields necessary to apply the servicer s payments. In all cases, the payment file should include the current loan balance, the corresponding renewal premium and tax due. Please note that failure to supply the loan balance could delay the posting of your payment. 28 Servicing Renewal Premium Billing and Payment