Open Lending to Implement Underwriting Changes to Mitigate Risk of COVID-19

We understand the unusual and unprecedented circumstances related to the COVID-19 pandemic. Open Lending and the Lenders Protection program experienced a downturn in the economy and rising unemployment during the great recession and our current program is built utilizing loan performance data over the last 20 years. 

During the great recession, we saw unemployment reach 10% and most of those losses during that time were surprisingly prime borrowers who were perceived to be low risk. It is more likely in a downturn that the multiple of increased defaults is higher in your prime portfolio than the non-prime. The average non-prime borrower can traditionally weather poorer economic conditions than their counterpart. 

To circumvent potential risk related to the current economic environment, we will implement the following risk mitigation changes to the program effective 3/25/2020:

  • Payment-to-Income (PTI) ratios –

    • Indirect Auto will have the following maximum PTI ratios based on LP Scores below:

      • 620+​  |  15% (Previously 18-20%)

      • 560-619  |  13% (Previously 15%)

    • Direct Auto and Refinance Auto will have the following maximum PTI ratios:

      • All Scores

      • 18% (Previously 20%)


  • Credit Report Expiration–

    • Approved Applications for all application channels (including Counter-approvals) will be valid for 30 days (Previously 45) from the initial credit report date in the Lenders Protection Platform

  • Proof of Income requirements (POI Stipulation) will apply to Refinance Auto applications for LP Scores 680 and below (Previously 620 and below)

  • Minor adjustments to maximum LTV’s will affect new applications submitted on and after April 6, 2020.  Automobile values will be discounted up to 10% for all vehicle values used in underwriting.


These modest revisions are intended to allow our clients to continue serving the automotive finance needs of your borrowers and protect the institution from additional risk we foresee related to the COVID-19 pandemic. 

With increased uncertainty in the market, some institutions are expanding triggers for when you use the Lenders Protection program and the additional risk related to COVID-19. Over 97% of clients achieved their yield targets during the recession. 

Program insurance carriers are financially strong, and the program is performing exceptionally well. Both insurance carriers have additional capacity and appetite for this business, and both maintain an “Excellent” rating by the AM Best rating agency and have no major insurance lines that subject them to catastrophic risk related to the COVID-19 pandemic. 

The revisions above will not affect applications submitted prior to March 25, 2020.  Program documentation with these revised guidelines will be available soon.