Is PMI required by federal law?
Borrower paid mortgage insurance (BPMI) means PMI is required for a residential mortgage transaction, the payments for which are made by the borrower. borrower when the cancellation and automatic termination dates are reached (12 U.S. C. § 4903(a)(1)(B)).
What is the PMI act?
The act, also known as the PMI Cancellation Act, addresses the difficulties homeowners have experienced in canceling pri- vate mortgage insurance (PMI) coverage. It allows prospective buyers who cannot, or choose not to, make a significant down payment to obtain mortgage financing at an affordable rate.
What qualifies for PMI cancellation under HPA?
PMI will automatically terminate when the loan balance is first scheduled to reach 78% of the original value of the mortgaged property regardless of the outstanding balance of the mortgage and the loan is current.
Can you refuse PMI?
Assuming you meet the requirements for LTV ratio, property value and any other necessary conditions, the PMI is eliminated from your mortgage. With these mortgages, if you ask the lender to remove PMI, they will rightfully refuse your request.
Can a bank refuse to remove PMI?
How did PMI work before the Homeowners Protection Act?
Before the Homeowners Protection Act, many homeowners had problems canceling PMI. In some instances, lenders may have agreed to terminate coverage when the borrower’s equity reached 20%, but policies for canceling PMI coverage varied widely among lenders, and homeowners had limited recourse if lenders refused to cancel PMI.
When did the Homeowners Protection Act of 1998 become effective?
Summary The Homeowners Protection Act of 1998 (HPA or PMI Cancellation Act, or Act) was signed into law on July 29, 1998, became effective on July 29, 1999, and was later amended on Dec. 27, 2000, to provide technical corrections and clarification.
When can I remove private mortgage insurance ( PMI )?
Federal law provides rights to remove PMI for many mortgages under certain circumstances. Some lenders and servicers may also allow for earlier removal of PMI under their own standards. The federal Homeowners Protection Act (HPA) provides rights to remove Private Mortgage Insurance (PMI) under certain circumstances.
What do you need to know about the Homeowners Protection Act?
The act, also known as the PMI Cancellation Act, mandates that lenders disclose certain information about PMI. The law also stipulates that PMI must be automatically terminated for homeowners who accumulate the required amount of equity in their homes (and thus, are no longer required to have purchased PMI).