Private Mortgage Insurance (PMI) - answer-Offered by private companies to insure a lender against default on a loan by a borrower where there is loss of collateral value at the time of the default
Private Mortgage Insurance (PMI) - answer-Required by Fannie Mae and Freddie Mac loans with less th...
Private Mortgage Insurance (PMI)
Private Mortgage Insurance (PMI) - answer-Offered by private companies to insure a lender
against default on a loan by a borrower where there is loss of collateral value at the time of
the default
Private Mortgage Insurance (PMI) - answer-Required by Fannie Mae and Freddie Mac loans
with less than 20% down
Private Mortgage Insurance (PMI) - answer-Insurer does not insure the entire loan amount:
Upper portion of loan that exceeds 80% LTV, Typically 20-25%
Recourse - answer-The lender may be able to pursue a deficiency judgment against the
borrower for any losses, depending on state statutes.
PMI Premiums - answer-Fee at Closing and Renewal Premium
PMI-Fee at Closing - answer-One-time, non-refundable fee. Able to finance when combined
with renewal premium. Monthly payments could be lower than just adding premium to
mortgage payment.
Home has been paid down to 78% of its original value
Attained 22% equity based on the original value
PMI Cancellation- Fannie Mae/Freddie Mac - answer-Cancellation at 78% for all mortgages
Expanded rules to cover investment properties and second homes
Will consider present value of the home
PMI Cancellation- At a borrower's request if conditions are met - answer-New appraisal
shows loan has been paid down to 80% or less of the homes original value (attained 20%
equity)
Shows history of timely payments for 12 months
No subordinate liens
PMI Cancellation- High Risk Loans, Conforming Loans - answer-PMI must be terminated at
the midpoint of the loan's initial amortization schedule
Written notice required stating the date that PMI will not be required
PMI Cancellation- High Risk Loans, Non-Conforming Loans - answer-PMI must be cancelled on
the date of the original amortization schedule where the loan is scheduled to reach 77% of
its original value
No disclosure required for cancellation at 77%
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