Understanding The Homeowner’s Protection Act of 1998
The Homeowner’s Protection Act of 1998 went into effect on July 29th, 1999 and applies to single-family homes, investment properties, and multifamily homes; and essentially says that if the loan to value ratio falls to 80%, a borrower in good standing can request from the lender that the requirement of having private mortgage insurance be nullified. If it falls to 78%, it must be done so automatically. If you’re not in good standing then the LTV ratio must fall to 50% if the borrower is current in payments.
Also, this must all be done at no cost to the borrower.
There are other parts of the Homeowner’s Protection Act of 1998 that don’t apply to PMI and they mostly refer to accurate disclosure at closing, annual notices, and other similar items. As for PMI, the most important aspects of what the Act demands have been summarized above.
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