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Old 09-13-2013, 07:03 PM
 
Location: Las Vegas, NV
229 posts, read 438,383 times
Reputation: 41

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I was speaking with a loan officer today on the phone in the state of Utah. This person asserted that PMI is required for a minimum of 3 years no matter the increase in equity. This didn't sound right to me at all. I am aware that the law changed recently for PMI on FHA loans; it's now required for the life of the loan. But conventional, 3 year minimum? And they claimed this is industry wide.
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Old 09-13-2013, 07:06 PM
 
Location: Huntington Woods, MI
1,742 posts, read 3,370,663 times
Reputation: 683
Guidelines for Fannie Mae and Freddy Mac are a minimum payment history of two years and a 75% loan to value percentage. The fact of the matter is that the bank isn't required to remove the PMI before the termination date.
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Old 09-13-2013, 07:09 PM
 
Location: Las Vegas, NV
229 posts, read 438,383 times
Reputation: 41
So even if my equity goes up, whether by extra payments by me, or some other economic event that causes home values to surge, I still have to pay for that lender's minimum of 3 years?
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Old 09-13-2013, 07:19 PM
 
Location: Huntington Woods, MI
1,742 posts, read 3,370,663 times
Reputation: 683
Two years is common on conventional loans. I work in the mortgage department of a bank and have specifically worked in the PMI department. We have to keep our investors happy. Fannie Mae and Freddy Mac want a minimum of two years. I'm not sure where the 3 years is coming from. If it's before your scheduled termination date, it's completely up to the lender. My advice is don't expect to have PMI removed early. Consider it a bonus if you get it removed early.
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Old 09-13-2013, 07:32 PM
 
Location: Las Vegas, NV
229 posts, read 438,383 times
Reputation: 41
I just found this too:

https://www.ugcorp.com/services/guid...celling_MI.pdf
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Old 09-13-2013, 07:38 PM
 
Location: Huntington Woods, MI
1,742 posts, read 3,370,663 times
Reputation: 683
Quote:
Originally Posted by Vegas-to-? View Post
Read the fine print. It says no 60 day lates in the past 24 months. That's why Fannie and Freddy and want at least 24 months. Removing PMI early is never easy.
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Old 09-13-2013, 07:41 PM
 
Location: Las Vegas, NV
229 posts, read 438,383 times
Reputation: 41
Ok I see, that's where the 2 years comes into play. So is my lender just tacking on another year? Can they do that?
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Old 09-13-2013, 07:43 PM
 
Location: Huntington Woods, MI
1,742 posts, read 3,370,663 times
Reputation: 683
Quote:
Originally Posted by Vegas-to-? View Post
Ok I see, that's where the 2 years comes into play. So is my lender just tacking on another year? Can they do that?
If it's before the scheduled termination date on your PMI disclosure, they are under no obligation to remove it. These are guidelines to remove it early. They are not requirements or laws.
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Old 09-13-2013, 07:47 PM
 
Location: Las Vegas, NV
229 posts, read 438,383 times
Reputation: 41
gotcha, I found the law (for anyone else interested in this topic)

12 USC 4901 - Definitions | Title 12 - Banks and Banking | U.S. Code | LII / Legal Information Institute
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Old 09-13-2013, 07:48 PM
 
Location: Huntington Woods, MI
1,742 posts, read 3,370,663 times
Reputation: 683
Is this a loan broker you are working with? I have found brokers are clueless with PMI. They just originate the loan and sell it. In fact today I had a customer angry since her broker said she could have PMI removed after 6 months on an FHA loan.
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