Homeowners Protection Act of 1998
by Erlvin from Kalamazoo, MI, USA
Regarding the Homeowner's Protection Act of 1998: Hi Kate! I have been making additional mortgage payments to reduce my principal balance. Scheduled 78% LTV (loan to value) date is 07/01/09 even though my mortgage balance is showing a lower LTV currently at 76%.
Anyway, I asked my lender about the automatic termination of PMI upon reaching 78% loan to value and they said that because I made additional payments to reduce my balance ahead of time I am not qualified to automatic termination of PMI.
Is that right? Please advise, Thank You.
Kate Answers: Homeowners Protection Act of 1998
Dear Erlvin, Seems suspicious, doesn't it? Then again there could be a valid reason for your lender's response. I understand how complicated unraveling this tangled mess can be. Sigh...
Let's break it down. Here are variables regarding your mortgage.
- Is your mortgage a conventional loan versus FHA or VA?
- Was your mortgage originated after July 29th, 1999?
- Does your mortgage have an acceptable payment history?
- Is your mortgage classified as high risk?
- Is your PMI borrower paid or lender paid?
Putting those thoughts aside, perhaps the person in loan servicing you spoke with was confused between Automatic Termination and Final Termination as spelled out in the Homeowner's Protection Act of 1998.
Do a search for the Homeowners Protection Act of 1998 as published by the Federal Reserve Bank of San Francisco to read more about private mortgage insurance termination and HPA.
If after reading through the termination facts you still believe you are entitled to PMI cancellation, don't give up! The Homeowner's Protection Act of 1998 was designed to protect homeowners from paying unnecessary private mortgage insurance.
I'd also recommend going back to your paperwork pertaining to current mortgage. You should have received a disclosure regarding your rights to cancel private mortgage insurance and exemptions to termination. Read through this too.Attention Homeowners Make sure you receive this disclosure when taking a mortgage with PMI and file it in a safe place. You should also receive an annual private mortgage insurance statement.
Back to you, Erlvin. Would you please write back and let me know what transpires?
I have provided links to more private mortgage insurance information below for your convenience. After reading through them, please let me know if you have additional questions.
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Finally! PMI Answers You Need
What Is PMI - Could private mortgage insurance be your solution to equity and down payment problems? 2013 Update: Deductible mortgage insurance premiums.
Updates on HARP 2.0 Refinance with Borrower and Lender Paid Mortgage Insurance - PMI and LPMI.
Could you be entitled to a mortgage insurance refund from FHA?
How do lenders calculate PMI? Credit history, amount of down payment or equity, occupancy status, and loan type factors.
How Do I Cancel PMI Will refinancing or a new appraisal be required?
What to do if PMI Decision Making is getting in the way of refinancing or buying a house.
My name is Kate and I will be your guide - PMI Questions and Answers