Mortgage Insurance issues the only thing stopping the show. Please comment

[Anonymous]

I have a JP Morgan/Chase application 30 Yr conventional, 10% down, where it has completed approved by  underwriting , and from what i am being told it cannot be submitted for mortgage insurance (MI) until it has completed underwriting.

Now it has completed underwriting and it returned declined by MI per the loan officer.

I have been getting my shoes broken all month for nit picking things the undewriter want and i reply asap with repetative request for the same doc. No big deal, but now declined due to MI? They want a 720 score per MI. I opened the application with a 713 and repulled for this MI disaster yesterday and it returned 717.  i have been pushing my closing week to week now.  Tuesday 28 is the deadline for the short sale opportunity. 

Have you heard of this?  I understand insurance if it is a risk then charge a higher premium.  e.g. bad drivers license = higher risk = higher premium.  but a decline?

Qualified from Chase standpoint, the steak,  but no peter lugars steak sauce from the Mortagage insurer?  

What can I do? 

 Thanks in advanced, 

In a pinch...

Message Edited by Doomkopft on 04-26-2009 06:05 AM

[medicgrrl]

You could try to do an 80/10/10 instead.  That's an 80% first with a 10% second.  This would avoid the MI altogether.  Also, see if you can get PMI thru another company but I am not sure if any are doing under 720 now.  Did your LO not advise you at the beginning that you would not qualify for the MI?

[Anonymous]

LO states he is dumbfounded.  That basically means if you are seeking a 30k conventional with 10% down

there is no way you are getting MI.

i cannot comprehend this.  

[medicgrrl]

Things have changed a lot since the default rate has increased.  Eventually the MI companies will have to make some changes or they will lose too much business.  They were losing business when the 80/10/10 was developed so they fought to make MI tax deductible.  Now with the new guidelines they will see themselves losing business yet again.  Ask your LO is Chase offers piggyback mortgages.  That will probably be your fastest solution.  You can also check with your bank to see if they offer them since you have a relationship with them already.  I always had great success getting the customers bank to get them done quick for me.  What state are you in?  Are you in a declining market?

Message Edited by medicgrrl on 04-26-2009 09:23 AM

[ShanetheMortgageMan]

Chase caps out at 75% CLTV for their 2nd mortgages, I know as I just inquired with them a couple weeks ago - 55% CLTV here in SoCal - yikes.  MI is a pain these days, but there isn't much you can do other than work on the FICO score or switch to FHA financing which does not have a 3rd party insurer re-underwriting the loan.  Actually with FHA and 10% down the monthly MI will be a tad cheaper, but you do have the upfront mortgage insurance premium of 1.75% which ultimately makes it not as good of a deal - but if you don't have any choice but wait for FICO score improvement or FHA, isn't a bad alternaive.

[Anonymous]

Were you abel to get around this?