by dlsimmons01 » Fri Sep 03, 2010 02:32 am
I have PMI insurance on my loan. When the loan was taken out in 11/06 they indicated that after one year I could request that it be removed. After one year the request was made but was told LTV had to be 80% and that I had to pay on the loan for two years. When the LTV finally hit 80% and I had paid on the loan for two years (no late payments ever I would like to point out), I requested that PMI be removed again. They indicated that an appraisal was needed. When I read the law it was my impression that once the LTV reach 78% that the cancellation would be automatic. I confirmed this with the lender over the phone because I did not want to make a big principal payment if PMI was not going to be removed. They confirmed the 78% and I made a substantial principal payment which brought the LTV to 77%. Again, PMI is still being collected. When I contacted them they said I had to request this in writing (didn't seem "automatic" to me if I had to request it). I requested it in writing and now I have a letter that indicates I have to be 75% LTV, AND pay on the loan for five years AND have an appraisal. When I made reference to the law they didn't seem to care and indicated that I had to continue paying PMI. Am I interpreting the law correctly? What legal recourse do I have? This just doesn't seem right!
Posted: Fri Sep 03, 2010 03:24 am Post Subject:
When I read the law it was my impression that once the LTV reach 78% that the cancellation would be automatic. . . . now I have a letter that indicates I have to be 75% LTV, AND pay on the loan for five years AND have an appraisal.
Unless there has been some change I am not aware of, once LTV descends below 80%, PMI must be taken off.
They indicated that an appraisal was needed.
Absolutely! Unless you get to the 80% level through loan payments alone (which is not likely to happen in the first two years, maybe not even in the first 10-15 years of a 30 year loan). But . . . it is the borrower's responsibility to prove the LTV by an appraisal from a licensed appraiser.
As for 75% and 5 years, I think someone is trying to fill a part of your anatomy with smoke.
Contact your state agency that regulates real estate lending practices and find out for sure -- you might even find information on their website. If a complaint is warranted, they'll tell you how to do that.
Posted: Fri Sep 03, 2010 03:38 am Post Subject:
As i understood it from a few years ago, PMI could be removed at 80% but the mortgage company may require an appraisal. At 78% it needed to be removed as long as certain other qualifications were met. I understood this basically to be that your payments were in good standing (no late payments for 12 months).
Is this an FHA or VA loan? If so, this removal of PMI does not apply. I also understand if your loan is "high risk" it may not apply.
Contact the FTC and file a complaint, 1-877-382-4357
http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt072.shtm
Posted: Fri Sep 10, 2010 12:17 pm Post Subject:
At 78% it needed to be removed as long as certain other qualifications were met.
May I know what other qualifications are you pointing at?Posted: Mon Sep 13, 2010 02:55 pm Post Subject:
Perhaps you did not see tcope's statement about the loan must be in good standing.
That's what PMI is all about . . . protecting the lender's interest in the event of a default. If the loan is not in good standing, even though the equity drags the LTV below 80%, the lender is still in a position to lose. So why permit the PMI to be dropped?
Posted: Mon Sep 13, 2010 04:00 pm Post Subject:
Perhaps you did not see tcope's statement about the loan must be in good standing.
Or bothered to click on the link that I provided as it explains everything.Add your comment