Hello All, anyone have any idea where to locate FNMA/FHLMC's definition of "high risk" for purposes of the HPA (PMI) Act?

I know that the standard borrower cancellation and automatic termination provisions do not apply to “high risk” loans. With respect to the “high risk” mortgages, PMI termination occurs at different times depending on if the loan is a conforming FNMA/FHLMC-defined “high risk” loan or a non-conforming, lender-defined “high risk loan.”

What exactly is FNMA/FHLMC's definition of "high risk" in this context, please, or where can I locate this information?

Thanks in advance.

The loan has to be designated as high risk at consummation. You cannot designate the loan as a high risk loan after the fact.

If I needed to know what Fannie and Freddie considered high risk for HOPA I would start by looking in the PMI section of their servicing guide.

Thank you.

The FHLMC PMI section - 27.1 - does not mention "high risk." So far, I am unable to locate that term in the Servicing Guide; perhaps "high risk" simply refers to a loan that does not result in an "Accept" from Loan Prospector (for example, a return of "Caution"). Does this sound correct?

Thanks again.

We do not deal in "high risk" loans so I have not researched the issue. HOPA in section 4902 does somewhat address a high risk loan in relation to the loan amount exceeding certain limitations. You might start there and then expand your search or even discuss with your EIC.

I personally would not rely on the DU/LP risk assessment.