How often must the service of a mortgage loan deliver a written disclosure describing the borrowers rights to cancel or terminate private mortgage insurance?
How often must the service of a mortgage loan deliver a written disclosure describing the borrowers rights to cancel or terminate private mortgage insurance?
For all residential mortgage transactions, including high risk mortgages for which PMI is required, the servicer must provide the borrower with an annual written statement that sets forth the rights of the borrower to PMI cancellation and termination and the address and telephone number that the borrower may use to …
What is the Homeowners Protection Act of 1998?
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 is PMI disclosure?
What is PMI Disclosure? PMI disclosure informs the borrower that the loan has a requirement for private mortgage insurance (PMI) and that the borrower has the right to request cancellation of PMI when the cancellation date has reached or that the PMI will automatically terminate upon the termination date.
Does your PMI automatically go away?
The lender or servicer must automatically terminate PMI when your mortgage balance reaches 78 percent of the original purchase price — in other words, when your loan-to-value (LTV) ratio drops to 78 percent. This is provided you are in good standing and haven’t missed any mortgage payments.
What was the Homeowners Protection Act passed for?
The Homeowners Protection Act (HPA) was passed in 1998 to address abuse of and confusion regarding homeowners’ requirements to pay for private mortgage insurance (PMI). The law requires that lenders must inform borrowers of their rights, including when they can cancel the insurance.
Is PMI required by law?
Borrower paid mortgage insurance (BPMI) means PMI is required for a residential mortgage transaction, the payments for which are made by the borrower.
Is a PMI disclosure required on a second home?
Mortgage loans secured by multi-family (2-4 family) dwellings, vacation homes, and second homes are not subject to the Homeowners Protection Act (HPA) and therefore, no PMI disclosure is required for multi- family loans or other loans not subject to the HPA.
Who enforces Homeowners Protection Act?
The Dodd-Frank Act granted authority to the Consumer Financial Protection Bureau (CFPB) to supervise for and enforce compliance with the Homeowners Protection Act with respect to entities within its jurisdiction. PMI is insurance that protects lenders from the risk of default and foreclosure.
Which are respa disclosures The borrower must receive?
Disclosures at Settlement At closing, the borrower must receive the final HUD-1 Settlement Statement showing the actual settlement costs of the transaction.
When did the Homeowners Protection Act of 1998 become effective?
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.
What is the Homeowners Protection Act (HPA)?
The HPA addresses homeowners’ difficulties in canceling private mortgage insurance (PMI) coverage. It establishes provisions for canceling and terminating PMI, sets disclosure and notification requirements, and requires the return of unearned premiums.
How does the PMI Act protect homeowners?
The Act now protects homeowners by prohibiting life of loan PMI coverage for borrower-paid PMI products and establishing uniform procedures for the cancellation and termination of PMI policies.
