City-Data Forum Please Help. My Lender is being evasive on expiration of MI in a 203k (insurance, loan)
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10-26-2012, 09:23 PM
 2 posts, read 1,986 times Reputation: 10

We are set to close next week and we are fed up with how evasive our lender has been regarding the MI on our 203k loan. Our purchase price is 190k and our remodeling project is about 100k + fees. Our mortgage loan is 284,475.00. My lender is saying I won't have to pay Mortgage insurance for 21 years which is what is stated in the Truth In Lending document we signed, but now are questioning. They first told us it was a mistake, then they said it was glitch, now they are saying it is only an estimate and means nothing. The lender sent me an ammortizatin of payments using their calculations.

The following is an email I sent to them today:
""I am looking at your numbers which are based on the loan amount but the TIL is based on the purchase price. According to your numbers MI should drop on Sept 2020 when the loan reaches 78% of 284,475.00 (loan amount) which is 237,743.50. However the TIL assumes 78% of 190,000 (purchase price). Therefore, the MI would drop in May 2031 when the mortgage reaches 147,497.24 which is 78% of the purchase price or 48.32% of the loan amount. I can't compare apples to oranges. Which scenario is our loan abiding to? Because these are two totally different scenarios. And I don't want to be in a position where I am assuming that the MI is going to drop because the loan is at \$237,743.50 (78% of mortgage loan), but I am going to be told I can't because it has to be \$147,497.24 (78% of purchase price). Pleasse advice. Which is accurate?""

Lender's response:

"" The overall consensus so far is, is that since your loan amount far exceeds the purchase price, that the program is setup to determine how long it will actually take for you to reach 78% loan to value based again on the loan size exceeding the purchase price.
I know this is confusing and frustrating. Ryan has given his assurances, you have signed a disclosure that explains the MI(attached) and I have provided you with what I believe is the most assuring of all from HUD’s website (previously today). I cannot get a TIL that says this unfortunately; however I have to again remind you that it is * and states estimate.""

They are guaranteeing that I won't pay 21 years of MI. When asked to have this in writing at the closing, they said to print our emails as proof!

10-27-2012, 11:59 AM
 Location: Austin 7,088 posts, read 16,940,984 times Reputation: 9522
Wow, how are you getting \$100k for the rehab? In my area, the max is \$35k. Where are you?

10-27-2012, 09:32 PM
 2 posts, read 1,986 times Reputation: 10
We are in Chicago. It's a full 203k.

10-28-2012, 08:35 AM
 Location: MID ATLANTIC 7,607 posts, read 17,676,484 times Reputation: 8107
Ask Ryan to send you a copy of the disclosure(s) you signed, chances are your answers are there.

If that doesn't prove successful, call the FHA Resource Center, 800 CALL FHA or (800) 225-5342 .
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