Posted on: 01st Jun, 2007 09:54 pm
i have been through the wringer with my mortgage company over pmi. they told me i could remove it if i got an appraisal, and when i did, they said they had made a mistake with the start date of my mortgage. since it hadn't been 2 years i was not elligible and they sent me a refund for the appraisal. i caused a great stink over this, and finally they sent me a letter saying that if i paid in the remainder of the 20% ( $22,000 ) they would remove it. it took 5 months for me to do that and now they say i need a new appraisal, specifically from their guys. needless to say, i am not pleased with this. i feel they have told me many untruths to keep me paying the pmi. one of those is that federal law requires me to get an appraisal to get the pmi off. in truth i think it is just them that is asking this.
also, one person there said that at 78% the pmi automatically comes off. his "supervisor" told me that it is actually 78% on a regular amoritization calendar, not if i had paid extra to pay the principal down.
what is the truth?
i also must ask one more thing. being a fist time home buyer i did not realize that $233 on a $180000 loan was extremely high and i was being swindled. am i just screwed on this point?
also, one person there said that at 78% the pmi automatically comes off. his "supervisor" told me that it is actually 78% on a regular amoritization calendar, not if i had paid extra to pay the principal down.
what is the truth?
i also must ask one more thing. being a fist time home buyer i did not realize that $233 on a $180000 loan was extremely high and i was being swindled. am i just screwed on this point?
I tell you these type of practice has become very common nowadays. The lenders just dont leave any opportunity to make money. I would suggest you to consult an attorney as soon as possible.
Also as much as I know $233 is a huge sum even for a first time home buyer.
Also as much as I know $233 is a huge sum even for a first time home buyer.
"his "supervisor" told me that it is actually 78% on a regular amoritization calendar, not if i had paid extra to pay the principal down. "
There is no specific difference on whether reduction in principal is because of regular amortization or extra payment towards principal. If it reaches 78%, it is to come off. You should ask that supervisor to show you some kind of documentation by which he can validate that it needs to be regular amortization. I am sure he will not be able to show any thing to prove his point.
There is no specific difference on whether reduction in principal is because of regular amortization or extra payment towards principal. If it reaches 78%, it is to come off. You should ask that supervisor to show you some kind of documentation by which he can validate that it needs to be regular amortization. I am sure he will not be able to show any thing to prove his point.
Yes, the PMI rate is high but most likely cause is that you're "Alt-A", i.e., FICO at the time of loan was less than 620. If that is in fact the case, you made your credit record and you are paying for it. Learn from the lesson and make corrections for the future. This likely had NOTHING to do with your first-time homebuyer status.
Yes, it sounds as if someone at the company made a "goof"; that's why they refunded the appraisal fee. Rather than relying on "bar room" advice from folks who maybe are not in the industry, go to the source. Basic law is 12USC4901 but in most cases the more liberal requirements of Fannie are followed. Pertinent announcements are 99-06 and 01-02. Clearest outline is in the attachment to 99-06 -- board will not permit me to give link but go to efanniemae.com and search on MI cancellation
Therein you will see the problem and can plot your course of action. Two years is a biggie but do pay attention to the LTV for less than 5 years. You may feel "better" getting an attorney but it likely will be a waste of money.
And no, lenders don't "make money", i.e. take a cut off the monthly MI, off continuation of mortgage insurance. However, their risk is reduced. One exception to the "making money" issue is the shared risk pitch MI were pushing a decade or so ago. Don't really know if this got off the ground but the basics involved participation in part of the premium in exchange for bearing part of the risk. This was conceived in the days when a priori assumption was that housing values would actually increase over time. Ah nostalgia!
The 78% ACTUAL balance for automatic cancellation is good only in "horse shoes" and for FHA loans. This does bring up some additional points which are good for future borrowers to consider.
• Why didn't you review and/or understand the MI cancellation disclosure given to you at the time of closing (I'm assuming you purchased in the last 6 or 7 years)?
• Did you just ignore the LOs presentation of the of TIL?
I know if I were paying $233 per month for MI, my eyes and ears would have perked up!
Is there light at the end of the tunnel? Probably if you take a reasoned approach. I'd try the aggrieved, "good" borrower approach. "I got misinformation and plunked extra money down so I'm hurting"(well, you actually got benefit received in terms of a shorter loan term); "Look at my clean payment record" (it better be); "I now understand the guideline issues but isn't there some approach we might take?" (may involve waiting out a time period or putting addition money towards mortgage).
For future borrowers needing MI – PAY ATTENTION WHEN THE LO REVIEWS FORMS. They're there for a purpose. Horse to water ….. Otherwise you have no one but yourself to blame!
Yes, it sounds as if someone at the company made a "goof"; that's why they refunded the appraisal fee. Rather than relying on "bar room" advice from folks who maybe are not in the industry, go to the source. Basic law is 12USC4901 but in most cases the more liberal requirements of Fannie are followed. Pertinent announcements are 99-06 and 01-02. Clearest outline is in the attachment to 99-06 -- board will not permit me to give link but go to efanniemae.com and search on MI cancellation
Therein you will see the problem and can plot your course of action. Two years is a biggie but do pay attention to the LTV for less than 5 years. You may feel "better" getting an attorney but it likely will be a waste of money.
And no, lenders don't "make money", i.e. take a cut off the monthly MI, off continuation of mortgage insurance. However, their risk is reduced. One exception to the "making money" issue is the shared risk pitch MI were pushing a decade or so ago. Don't really know if this got off the ground but the basics involved participation in part of the premium in exchange for bearing part of the risk. This was conceived in the days when a priori assumption was that housing values would actually increase over time. Ah nostalgia!
The 78% ACTUAL balance for automatic cancellation is good only in "horse shoes" and for FHA loans. This does bring up some additional points which are good for future borrowers to consider.
• Why didn't you review and/or understand the MI cancellation disclosure given to you at the time of closing (I'm assuming you purchased in the last 6 or 7 years)?
• Did you just ignore the LOs presentation of the of TIL?
I know if I were paying $233 per month for MI, my eyes and ears would have perked up!
Is there light at the end of the tunnel? Probably if you take a reasoned approach. I'd try the aggrieved, "good" borrower approach. "I got misinformation and plunked extra money down so I'm hurting"(well, you actually got benefit received in terms of a shorter loan term); "Look at my clean payment record" (it better be); "I now understand the guideline issues but isn't there some approach we might take?" (may involve waiting out a time period or putting addition money towards mortgage).
For future borrowers needing MI – PAY ATTENTION WHEN THE LO REVIEWS FORMS. They're there for a purpose. Horse to water ….. Otherwise you have no one but yourself to blame!