1. 1 BENEFITS OF MORTGAGE INSURANCE Presented by: MGIC, Suzanne LaCaria, Senior Account Manager Essent, Donny Rosenthal, Senior Account Manager Radian, Randi Gocinski, Senior Account Manager

2. 2 Private MI Premium plans Monthly Singles - Borrower-paid - Lender-paid Splits

3. 3 MonthlySplitSingle Borrower-paidLender-paid Upfront premium No Hybrid Variable up-front with lower monthly renewal Yes Included in rate or origination fee Monthly premium YesNo Cancellation Yes Typically not with non-refundable premiums No Refundability Nothing – collected in arrears No Not typical, but is an option No

4. 4 Monthly MI Paid monthly w/mortgage payment Versatile May be cancelled No up-front costs

5. 5 Single Premium – Borrower-paid Premium paid up front or financed into the loan amount Paid by borrower, seller, builder or 3rd party Portion may be refundable when cancelled (if refundable premium option is chosen) Be aware of maximum CLTV depending on who loan is being sold to

6. 6 Paid by lender or 3rd party Lender recoups cost via – Higher interest rate – Fees Single Premium – Lender-paid

7. 7 Splits Up-front premium combined w/lower monthly renewal Up-front premium may be paid by borrower, 3rd party or financed May be cancelled

8. 8 MI Cancellation – original value  Automatic Termination @ 78% LTV 78% of original value, based solely on the initial amortization schedule  Borrower requested @ 80% LTV 80% of original value, based solely on the initial amortization schedule OR on the date the loan balance actually reaches 80% of the original value: no subordinate liens good payment history borrower must satisfy Lender’s requirement property value has not declined

9. 9 MI Cancellation – current value Fannie Mae and Freddie Mac typically require:  the loan must be seasoned at least 2 years AND  the borrowers have an acceptable payment history AND  the LTV based on a current appraisal is:  75% LTV or lower if less than 5 years have elapsed since the loan originally closed OR  80% LTV or lower the LTV if more than 5 years have elapsed since the loan originally closed

10. Conventional MI vs. FHA It’s All In The Numbers

11. 11 FHA to Increase MIP FHA to increase the Annual MIP by 10 bps. Effective for case numbers assigned on or after April 9, 2012. FHA to increase the UFMIP. Effective for case numbers assigned on or after April 9, 2012. FHA to increase the UFMIP. Effective for case numbers assigned on or after April 9, 2012. Term > 15 Years Base Loan Amount LTV Effective Annual MIP Any Amt< 95%4/9/20121.20 % Any Amt> 95%4/9/20121.25 % Term < 15 Years with LTV above 78% Any Amt< 90%4/9/2012.35 % Any Amt> 90%4/9/2012.60 % Increase in FHA Upfront MIP Currently Effective April 9, 2012 1.0 %1.75% Effective June 11, 2012; FHA to add additional 25 bps to mortgages with base loan amounts exceeding $625,500.

12. 12 MI Payment Comparisons What you get with BPMI Monthly No Upfront Premium Rate 1.75% Upfront Premium Rate Loan Amount$360,000 Upfront Premium Amount---- Total Loan Amount with upfront premium$360,000 Monthly MI Renewal Rate.59% Monthly MI Premium$177 P&I Payment$1,719 P&I + MI$1,896 Assumes: Purchase transaction with a 30 year FRM, a 4.00% interest rate on Radian BPMI and 3.75% interest rate for FHA, 760 FICO What you get with FHA Radian’s BPMI Monthly vs. FHA on an 95% LTV MONTHLY SAVINGS of $160! Loan Amount$360,000 Upfront FHA Premium (Financed)$6,300 Total Loan Amount with upfront premium$366,300 Monthly FHA Renewal Rate 1.20% Monthly FHA MIP Premium$360 P&I Payment$1,696 P&I + MIP$2,056 Reflects FHA Rates Effective April 2012 and Radian MI Pricing as of May 1 st, 2012

13. 13 FHABPMI Monthly Sale Price $168,632$183,158 Base Loan $160,200$174,000 Upfront Premium Rate 1.75%----- Upfront Payment $2,804 ----- Gross Loan $162,904$174,000 Note Rate 3.75%3.875% P&I Payment $755$818 MI Rate 1.20% Per MI Company MI Payment $160Per MI Company Total Monthly Payment $915 Assumptions: 30 year amortization, 720+ FICO, Purchase, Reflects FHA Rates Effective April 2012 MI Payment Comparisons Sale Price Total Monthly Payment ~ $14,500 More home for the same monthly payment! BPMI Monthly vs. FHA on an 95% LTV

14. 14 MI Payment Comparisons What you get with Borrower Paid Single Conv. MI Upfront Premium Rate Per MI Co. 1.75% Upfront Premium Rate Base Loan Amount $285,000 Upfront Premium Amount (Financed) Per MI Company Total Loan Amount with upfront premium $291,128 Monthly MI Renewal Rate n/a Monthly MI Premium n/a P&I Payment $1,369 P&I + MI $1,369 What you get with FHA MONTHLY SAVINGS of $259! Base Loan Amount $285,000 Upfront FHA Premium (Financed) $4,988 Total Loan Amount with upfront premium $289,988 Monthly FHA Renewal Rate 1.20% Monthly FHA MIP Premium $285 P&I Payment $1,343 P&I + MIP $1,628 Assumes: Purchase transaction with a 30 year FRM, 740 FICO, Conv MI reflects note rate of 3.875 while FHA reflects note rate of 3.750 BPMI Single Financed vs. FHA on a 95% LTV Reflects FHA Rates Effective April, 2012

15. 15 What you get with FHA MI Payment Comparisons What you get with Borrower Paid Single Conv. MI Upfront Premium Rate per MI Co. 1.75% Upfront Premium Rate Assumes: Purchase transaction with a 30 year FRM with a 740 FICO BPMI Single Financed vs. FHA on a 95% LTV More than 30% more home for the same monthly payment! Sale Price $306,842 Base Loan Amount at 95% LTV $291,500 Upfront MI Rate Per MI Company Gross Loan Amount (97.15% CLTV) $297,767 P&I Payment @ 3.875% $ 1,400 Monthly MI Premium $0 P&I + MI $1,400 Sale Price $258,000 Base Loan Amount at 95% LTV $245,100 Upfront FHA Premium (Financed) $4,289 Gross Loan Amount (96% CLTV) $249,389 P&I Payment @ 3.750% $1,155 Monthly FHA MIP Premium (1.20%) $ 245 P&I + MIP $1,400 Reflects FHA Rates Effective April, 2012

16. 16 What you get with FHA MI Payment Comparisons What you get with Borrower Paid Single Conventional Upfront Premium Rate 1.75% Upfront Premium Rate BPMI Single Paid in Cash vs. FHA on a 95% LTV The same payment... ~$55,000 more buying power! Sale Price $313,368 Base Loan Amount at 95% LTV $297,700 Upfront MI Rate (Paid in Cash) Per MI Company Gross Loan Amount $297,700 P&I Payment @ 3.875% $1,400 Monthly MI Premium $0 P&I Payment $1,400 Sale Price $258,000 Base Loan Amount at 95% LTV $245,100 Upfront FHA Premium (Financed) $4,289 Gross Loan Amount $249,389 P&I Payment @ 3.750% $1,155 Monthly FHA MIP Premium (1.20%) $ 245 P&I + MIP $1,400 Assumes: Purchase transaction with a 30 year FRM, 740 FICO Reflects FHA Rates Effective April, 2012

17. 17 Assumes: 740 FICO, Purchase transaction with a 30 year FRM What you get with Lender Paid Singles MI Payment Comparisons What you get with FHA Lender Paid MI Premium Rate 4.25% Note Rate 1.75% Upfront Premium Rate 3.75% Note Rate Loan Amount$360,000 Financed Upfront Premium Amount$0 Total Loan Amount$360,000 Monthly MI Renewal Raten/a Monthly MI Premium$0 P&I Payment$1,771 P&I + MI$1,771 LPMI Single vs. FHA on a 95% LTV, with.5% increase Monthly Savings of $285! Loan Amount$360,000 Upfront FHA Premium (Financed)$6,300 Total Loan Amount with Upfront premium$366,300 Monthly FHA Renewal Rate 1.20% Monthly FHA MIP Premium$360 P&I Payment$1,696 P&I + MIP$2,056 Reflects FHA Rates Effective April, 2012

18. 18 MI Payment Comparisons LPMI Premium Rate 4.25% Note Rate 1.75% Upfront Premium Rate 3.75% Note Rate Loan Amount$237,500 Financed Upfront Premium Amount$0 Total Loan Amount$237,500 Monthly MI Renewal Raten/a Monthly MI Premium$0 P&I Payment$1,168 Assumes: 740 Fico, Purchase transaction with a 30 yr FRM. What you get with Lender Paid Singles What you get with FHA P&I + MI$1,168 P&I + MI $1,357 Monthly Savings of $189! Loan Amount $237,500 Upfront FHA Premium (Financed)$4,156 Total Loan Amount with Upfront premium$241,656 Monthly FHA Renewal Rate 1.20% Monthly FHA MIP Premium$238 P&I Payment$1,119 LPMI Singles vs. FHA on a 95% LTV, with a.75% increase Reflects FHA Rates Effective April, 2012

19. 19 Close More Loans Based on a 30-year 95% LTV loan, a base loan amount of $285,000 and a FICO of 720; interest rate is 3.75% for BPMI and 3.25% for FHA (Based on April 2012 FHA MIP Increases)

20. 20 Qualify More Borrowers

21. 21 BENEFITS OF MORTGAGE INSURANCE Presented by: MGIC, Suzanne LaCaria, Senior Account Manager Essent, Donny Rosenthal, Senior Account Manager Radian, Randi Gocinski, Senior Account Manager