Amerin Guaranty Corp. said it has signed up a leading Northeast lender to offer its innovative mortgage insurance.
Arbor National Mortgage, Westbury, N.Y., will begin offering consumers Amerin's lender-paid insurance at all its 21 branches, according to Nancy Boles,. Arbor senior vice president.
It works like this: Chicago-based Amerin delegates underwriting authority to lenders, which pay for the insurance and pass the costs to homeowners through higher mortgage rates.
Arbor expects to use the Amerin product for 25% to 30% of its retail loans that require insurance, Ms. Boles said. In its last fiscal year, Arbor posted $2.05 billion in total retail originations.
Slightly More Extensive
Amerin mortgage insurance will be slightly more expensive for the consumer - for a $100,000, 30-year, fixed-rate
loan with a 95% loan-to-value ratio the cost will be about $30 more a year.
Despite a higher cost, Ms. Boles expects the insurance to be especially attractive to first-time homebuyers for whom closing costs are a major stumbling block.
Because Amerin insurance adds mortgage insurance costs to the interest rate, it eliminates the need for a lump sum mortgage payment at closing.
Separately, McCue Mortgage Co., New Britain. Conn., has become that state's first lender to offer, Amerin's lender-paid insurance.