that offers servicers a simplified method for handling monthly mortgage insurance payments. The product also eliminates the need for borrowers to pay premiums at the closing of their loan. On a typical loan, this payment would be about $130 to cover the first two months of insurance, the company said. MGIC says premium rates under the new plan are the same as with other monthly programs. "We went to great pains to work with service bureaus and various servicers to determine what would work for them. As a result, we've developed a process that simplifies servicing for mortgage insurance," said Curt Culver, MGIC executive vice president for marketing and field operations. A spokesman explained the plan simplifies loan setup because it clears up any confusion about how much premium is due when the loan closes, as the amount is always zero. It also eliminates the need for an escrow cushion and clarifies what dates are to be entered in the loan files, he said. Borrowers must pay mortgage insurance as an extra protection against default if they make a down payment of less than 20%. Insurers have introduced monthly payment plans to eliminate the need for a one-year payment at closing. Reduction of closing costs has been a major initiative in the mortgage industry in recent years. Eliminating the initial payment takes the idea one step further. Republic Mortgage Insurance Co., Winston-Salem, N.C., introduced a similar product last month.

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