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PMI (Private Mortgage Insurance) question
Posted by: space-time
Date: January 08, 2015 11:42AM
I reached the 78% Loan-to-Value, but lender company claims I need to wait until 2 years passed (I have about 20 months now) and then they drop the PMI.

A quick search online seems to indicate that indeed they may impose such a limit, but I wanted to check if there is any way to force them to cancel it now, I have perfect payment history, excellent credit score. This would same me about 4 months of PMI

EDIT: this gov page does not seem to mention that I need to wait for 2 years

[www.consumerfinance.gov]



Edited 1 time(s). Last edit at 01/08/2015 11:45AM by space-time.
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Re: PMI (Private Mortgage Insurance) question
Posted by: Lux Interior
Date: January 08, 2015 11:54AM
Re-finance?

Although, if you got the loan 20 months ago, you probably wouldn't get as good a rate. Probably better to pay the PMI for 4 months.
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Re: PMI (Private Mortgage Insurance) question
Posted by: mattkime
Date: January 08, 2015 12:15PM
You have to pay it



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Re: PMI (Private Mortgage Insurance) question
Posted by: space-time
Date: January 08, 2015 12:17PM
Quote
Lux Interior
Re-finance?

Although, if you got the loan 20 months ago, you probably wouldn't get as good a rate. Probably better to pay the PMI for 4 months.

no more refinance, I started with 30 year at 5.25% in 2009 and refinance in 2013 at 15 year, 2.85%, and ended up with same monthly payment but 11 year faster than original term. No way I refinance again.
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Re: PMI (Private Mortgage Insurance) question
Posted by: Lux Interior
Date: January 08, 2015 12:22PM
Quote
space-time
No way I refinance again.

Certainly not if it isn't to your (financial) advantage.
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Re: PMI (Private Mortgage Insurance) question
Posted by: rgG
Date: January 08, 2015 12:35PM
Well, that sucks, but most loan documents are written just to protect the lender and they couldn't care less about what is fair or in your best interest.





Roswell, GA (Atlanta suburb)
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Re: PMI (Private Mortgage Insurance) question
Posted by: JoeH
Date: January 08, 2015 12:40PM
Unless it is written into the mortgage documents, the lender can not impose such a 2 year minimum. You would have to examine your loan paperwork to see if it does have a clause stating such. If not, then state and federal laws apply. If the clause is there, well that is why a lawyer is usually retained by consumers to review such contracts and advise on whether to keep the clause or negotiate it out.
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Re: PMI (Private Mortgage Insurance) question
Posted by: NewtonMP2100
Date: January 08, 2015 12:54PM
this PMI....is TMI.....



_____________________________________

I reject your reality and substitute my own!
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Re: PMI (Private Mortgage Insurance) question
Posted by: mattkime
Date: January 08, 2015 02:58PM
I believe they are legally obligated to let you out if you own 22% of the value of the house. that said, i think the two year minimum is common and unfortunately enforced.



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Re: PMI (Private Mortgage Insurance) question
Posted by: space-time
Date: January 08, 2015 06:23PM
Quote
JoeH
Unless it is written into the mortgage documents, the lender can not impose such a 2 year minimum. You would have to examine your loan paperwork to see if it does have a clause stating such. If not, then state and federal laws apply. If the clause is there, well that is why a lawyer is usually retained by consumers to review such contracts and advise on whether to keep the clause or negotiate it out.

I went and examined the original loan documents (May 2013) and it clearly says that automatic cancellation will occur on January 2015 when I reach 78%. There is no 2 year limit. This is the document from the original mortgage company. Now they sold it to another bank,

Now earlier this morning when I called the bank, they said they have this 2 year rule. I asked for documents, they said they will mail those to me. A few minutes later under "loan documents" online I already saw the letter as a PDF. it clearly says 78% AND 2 year.

I will get the letter in the mail and reply back with a copy of my loan documents. It should be easy to fight this and save $160.
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Re: PMI (Private Mortgage Insurance) question
Posted by: JoeH
Date: January 08, 2015 06:56PM
Good, then your original loan documents apply and they have no legal way of requiring you to continue paying PMI. When a new company acquires a loan or the existing mortgage holder changes the rules they do not get to rewrite the contract.
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Re: PMI (Private Mortgage Insurance) question
Posted by: Racer X
Date: January 08, 2015 07:38PM
Your original loan docs are what you signed, not the docs that the new mortgage holder generated. I agree with Joe H.
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Re: PMI (Private Mortgage Insurance) question
Posted by: onthedownlow
Date: January 09, 2015 12:34AM
I had a near-exact situation and I called to see about getting it removed (because according to them it was just supposed to drop-off automatically once it hit that magic number). They then told me that I would need to formally request it to be removed, via a letter - I did. Then weeks later I received a nice mailed several-page packet of information explaining they received it and they would need to take it to their general counsel, or some crap like that, for some meeting and determination based on terms and whatnot, and then they would let me know a formal decision at a later date.

I didn't hear anything at all, and then three months later I noticed it was dropped from my mortgage. I received a letter confirming it a few months after that.



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Re: PMI (Private Mortgage Insurance) question
Posted by: Mr645
Date: January 09, 2015 01:24PM
The bank is required to honor the original mortgage contract. I had a problem with Chase Bank as to their insurance requirements, which differ with mortgage contract I signed with Washington Mutual.

They kept reading me page 71 that states I must maintain insurance equal or greater then the loan balance. My mortgage contract is only 53 pages.

The mortgage contract I signed with W Mutual said I had to maintain insurance equal to either the loan balance or the value of the improvement on the land (Meaning my physical home). Due to home values at the time, my building, not including land value, was less then the loan value.

Chase charged me thousands in supplimental insurance and we went to arbitration, as per the mortgage contract. The bank is required to honor the outcome of arbitration, but I am not and can proceed to a law suit if I am unhappy with the outcome of arbitration.

Anyway, the lawyer for Chase showed up, we met with the court assigned arbitrator and it took ten minutes for the Chase lawyer to read over the notes and they offered to remove all additional insurance costs added to the loan, credit me anything amounts paid in late fees and monies applied to such fees paid by me, and offered me $1500 in compensation for time and aggravation. The Lawyer told the arbitrator they his client was wrong, and cannot enforce the mortgage contract that I never signed. The arbitrator asked I am willing to accept the offer fro mChase, I did, check arrived in less then a week.



Edited 1 time(s). Last edit at 01/09/2015 01:25PM by Mr645.
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Re: PMI (Private Mortgage Insurance) question
Posted by: Speedy
Date: January 11, 2015 02:30AM
This is the feel good story of the day!

Quote
Mr645
The bank is required to honor the original mortgage contract. I had a problem with Chase Bank as to their insurance requirements, which differ with mortgage contract I signed with Washington Mutual.

They kept reading me page 71 that states I must maintain insurance equal or greater then the loan balance. My mortgage contract is only 53 pages.

The mortgage contract I signed with W Mutual said I had to maintain insurance equal to either the loan balance or the value of the improvement on the land (Meaning my physical home). Due to home values at the time, my building, not including land value, was less then the loan value.

Chase charged me thousands in supplimental insurance and we went to arbitration, as per the mortgage contract. The bank is required to honor the outcome of arbitration, but I am not and can proceed to a law suit if I am unhappy with the outcome of arbitration.

Anyway, the lawyer for Chase showed up, we met with the court assigned arbitrator and it took ten minutes for the Chase lawyer to read over the notes and they offered to remove all additional insurance costs added to the loan, credit me anything amounts paid in late fees and monies applied to such fees paid by me, and offered me $1500 in compensation for time and aggravation. The Lawyer told the arbitrator they his client was wrong, and cannot enforce the mortgage contract that I never signed. The arbitrator asked I am willing to accept the offer fro mChase, I did, check arrived in less then a week.



Saint Cloud, Minnesota, where the weather is wonderful even when it isn't.
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