automatic termination of pmi

The required percentage for borrower requested pmi cancellation may also vary based on the details of your loan. If it is a refinance, investment property/non-primary residence, the type of loan, if the loan has been modified, specific state laws, may all impact the specific cancellation requirements. Hopefully this.

3. Automatic Termination . In addition to providing borrowers with a right to request PMI cancellation, the HPA provides that, if the borrower is current on the loan, the requirement for PMI must automatically be terminated for residential mortgage transactions on the "termination date." 8. The HPA defines . 3. 12 USC 4901(2).

Automatic PMI Termination. -The Act also requires that PMI in connection with a residential mortgage transaction must be terminated: on the “termination date” if the mortgagor is current on payments required under the terms of the loan; or

PMI will automatically terminate on the first day of the month immediately following the date you thereafter become current on your payments. Exceptions to Cancellation and Automatic Termination The cancellation and automatic termination requires described above do not apply to certain loans that may present a higher risk of default. Your

request or by the automatic termination provision, the servicer must terminate PMI coverage by the first day of the month immediately following the date that is the midpoint of the loan’s amortization period if, on that date, the borrower is current on the payments required by the

The Homeowners Protection Act (HoPA) of 1998 established rules for both automatic termination and borrower cancellation of borrower-paid private mortgage insurance (BPMI) on certain home mortgages. The HoPA requires that BPMI be cancelled when a borrower has built up a certain amount of equity in their home.

Also, automatic PMI cancellation is only available on mortgages that were originated after the Homeowner Protection Act took effect in 1999. For certain mortgages designated by Fannie Mae or Freddie Mac as "high risk," the loan balance must fall to 77 percent to qualify for automatic PMI cancellation.

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Automatic cancellation of PMI occurs under most circumstances when the remaining loan balance reaches 78% of the original loan achieved via principal pay down, which could take many years. Thus, borrowers will want to be aware of their equity position and petition their lender to have their PMI.