PMI Mortgage Insurance Co. has signed up a leading nonprofit organization, Neighborhood Housing Services of America, to use its automated underwriting and mortgage-scoring system for loan originations.
In addition to using the PMIAura system for loan underwriting, Neighborhood Housing Services and its network of lenders will also utilize the Internet to access borrower work sheets and transmit applications from PMIAura.
As a result, lenders will be able to use the work sheet to counsel borrowers that may have been turned down for mortgages. PMIAura scores the loan and if it turns the application down, also provides reasons for referral.
"This is an opportunity not only to understand and measure risk, but to work with strong partners in the process," said W. Roger Haughton, president and chief executive of PMI, the nation's third-largest mortgage insurer based in San Francisco. "This is a type of partnership that will advance affordable housing in this country."
Oakland, Calif.-based Neighborhood Housing Services purchases loans from its network of nonprofit community-based lenders. The group sells notes backed by these loans to investors to gain support from the private sector.
Juliette B. Madison, PMI's vice president of community outreach and corporate relations, said that the partnership, formed last month, was the first time a large national nonprofit organization has been offered access to an automated underwriting system.
"This is somewhat of a revolution. Nonprofits had expressed concerns about how automated underwriting will address their constituents," Ms. Madison said.
PMI and Neighborhood Housing Services have been part of a risk- sharing, affordable housing alliance since 1990. The two groups are part of a $100 million effort to provide mortgages to low-income borrowers in inner-city neighborhoods.
Most recently, the two companies announced that they would be joined by 10 Southern California banks and thrifts in providing mortgages to minorities and low-income borrowers in Los Angeles. PMI will offer the insurance and perform the underwriting on a contract basis for the lenders, and Neighborhood Housing Services will service the loans.
Mary Lee Widener, president of the housing group is also a board member of PMI Group, the parent company of PMI Mortgage Insurance.