Guidelines for Mortgage Underwriting Practices and Procedures

(a) Principle 1: Insurers that are engaged in mortgage underwriting and/or the acquisition of mortgage loan assets should have a comprehensive Mortgage Underwriting Policy (MUP). Mortgage practices and procedures of insurers should comply with their established MUP.

(b) Principle 2: Insurers should perform reasonable due diligence to record and assess the borrower’s identity, background and willingness to service their debt obligations on a timely basis.

(c) Principle 3: Insurers should adequately assess the borrower’s capacity to service their debt obligations on a timely basis.

(d) Principle 4: Insurers should have sound collateral management and appraisal processes for the underlying mortgage properties.

(e) Principle 5: Insurers should have effective credit and counterparty risk management practices and procedures that support mortgage underwriting and mortgage portfolio management, including, as appropriate, mortgage insurance.

The Guidelines also embed internal control, monitoring and reporting mechanism by spelling out the role and responsibilities of the Board and of Senior Management of insurers. The Guidelines can be downloaded on: https://www.fscmauritius.org/media/101785/guidelines-for-mortgage-underwriting-practices-and-procedures.pdf