PMI and stupid customer service

[SomedayStache]

When we refinanced our mortgage in 2012 I thought all along we had to get to 80% LTV to cancel PMI.
I called my bank in March to confirm that was the case and got a dollar value that we had to reach.
Last week I mailed in a $3500 principal payment as instructed in March with the intent to cancel PMI.
Today I called to confirm that we had met the requirements to cancel PMI and the teller I spoke with informs me that because the mortgage is less than 5 years old we actually have to reach 75% LTV.  That's an additional $7500 which is currently out of reach for us.  If I had known this I wouldn't have wasted that extra principal payment.  I feel tricked and betrayed by stupid people.  AGGHH!

Thanks for listening.  This isn't something people around me in real life would understand.

[SomedayStache]

Since the inquiry in March wasn't combative I broke my usual customer service pattern of getting a name of the person I spoke with and documenting exact time/date/details of call.  How many more times do I need to learn that particular lesson? 

[MishMash]

Yea that enraged me too.  We had the same thing with Wells Fargo on our house.  We had literally 3 months of PMI payments until we hit 80%, and they assured us we could cancel.  Nope!  When I called they said I'd have to pay 800 out of pocket for another appraisal, or wait for 75% (PMI was only 35 a month)...a new appraisal THREE MONTHS after they did a full appraisal to approve the loan.  I was LIVID.

[forummm]

PMI rules have gotten really bad since the crisis. They are trying to pay back all the losses they took. Many FHA loans now make it impossible to get rid of PMI until you hit a certain number of years, even if your LTV is 50%.

[SomedayStache]

I have a conventional loan-not FHA.

I'm just so frustrated.  I sent in  a letter with the $3500 payment requesting that this amount be applied to principal in order to cancel PMI (as instructed by the customer service lady in March).  So even if I spoke with the one blatantly lying person on the phone in March I feel like I should have been contacted, based on the details in my letter, to be told that PMI wouldn't be cancelled.

This is Bank of Oklahoma if anyone is wondering.  Maybe I should start looking at refinancing with our credit union - I have no idea where mortgage rates are right now though.

[clarkm04]

Your mortgage documents will list what you need to accomplish to eliminate PMI. 

Once, you meet those requirements, mail a certified letter to the bank's mortgage department demonstrating you now meet the requirements and are inquiring what else needs to be done to eliminate the PMI.

The bank should send you a letter back stating what else needs to be done to eliminate it.

That's the steps we took. The letter we received was a checklist of things still needed to remove the PMI.

Yes, it was silly to have our house appraised again less than 8 months after purchasing, but that's typical language and the bank doesn't want to lose a great recurring fee.

I just felt silly in not having 20% for our house when we purchased.

Best of luck on getting your PMIs removed!

[tct]

Since the inquiry in March wasn't combative I broke my usual customer service pattern of getting a name of the person I spoke with and documenting exact time/date/details of call.  How many more times do I need to learn that particular lesson?

This doesn't do any good anyway. I did this when making changes to my Qwest DSL service. The representative on the phone assured me that I wouldn't lose my price for life when upgrading to a higher speed.  I documented everything, sure enough my price for life on DSL was gone. After climbing the ladder to talk to highest level I could on the phone, I was told that rules/contract state that if you make any changes to your account, you lose the price for life and nothing a Qwest representative says on the phone can change that.

[MishMash]

Your mortgage documents will list what you need to accomplish to eliminate PMI. 

Once, you meet those requirements, mail a certified letter to the bank's mortgage department demonstrating you now meet the requirements and are inquiring what else needs to be done to eliminate the PMI.

The bank should send you a letter back stating what else needs to be done to eliminate it.

That's the steps we took. The letter we received was a checklist of things still needed to remove the PMI.

Yes, it was silly to have our house appraised again less than 8 months after purchasing, but that's typical language and the bank doesn't want to lose a great recurring fee.

I just felt silly in not having 20% for our house when we purchased.

Best of luck on getting your PMIs removed!

Our mortgage documents said we could request for PMI to be dropped at 80% as 80% was the sufficient threshold, they denied it...frankly I think it's borderline fraud that they advertise that...then deny it.  Our only option was to pay X thousands more to principle...which we were going to hit in 8 months on our mortgage (15 yr with monthly extra payments) anyway so it was cheaper for us to just stick with the PMI until it dropped off

[forummm]

Your mortgage documents will list what you need to accomplish to eliminate PMI. 

Once, you meet those requirements, mail a certified letter to the bank's mortgage department demonstrating you now meet the requirements and are inquiring what else needs to be done to eliminate the PMI.

The bank should send you a letter back stating what else needs to be done to eliminate it.

That's the steps we took. The letter we received was a checklist of things still needed to remove the PMI.

Yes, it was silly to have our house appraised again less than 8 months after purchasing, but that's typical language and the bank doesn't want to lose a great recurring fee.

I just felt silly in not having 20% for our house when we purchased.

Best of luck on getting your PMIs removed!

Our mortgage documents said we could request for PMI to be dropped at 80% as 80% was the sufficient threshold, they denied it...frankly I think it's borderline fraud that they advertise that...then deny it.  Our only option was to pay X thousands more to principle...which we were going to hit in 8 months on our mortgage (15 yr with monthly extra payments) anyway so it was cheaper for us to just stick with the PMI until it dropped off

"could request"? That does sound shady and misleading.

I have a conventional loan-not FHA.

I'm just so frustrated.  I sent in  a letter with the $3500 payment requesting that this amount be applied to principal in order to cancel PMI (as instructed by the customer service lady in March).  So even if I spoke with the one blatantly lying person on the phone in March I feel like I should have been contacted, based on the details in my letter, to be told that PMI wouldn't be cancelled.

This is Bank of Oklahoma if anyone is wondering.  Maybe I should start looking at refinancing with our credit union - I have no idea where mortgage rates are right now though.

Mortgage rates are pretty low. This is my favorite site for seeing what the market looks like:
http://www.aimloan.com/

[projekt]

Generally speaking, they shouldn't blow you off like this. Here is a page from the CFPB:

http://www.consumerfinance.gov/askcfpb/202/when-can-i-remove-private-mortgage-pmi-insurance-from-my-loan.html

In general, they should honor a request in writing if it meets the general criteria.

Request PMI cancellation
The Homeowners Protection Act gives you the right to request that your lender cancel PMI when you have reached the date when the principal balance of your mortgage is scheduled to fall to 80 percent of the original value of your home. This date should have been given to you in writing on a PMI disclosure form when you received your mortgage. If you can't find the disclosure form, contact your lender. 

You can also make this request earlier if you have made additional payments to reduce the principal balance of your mortgage to 80 percent of the original value of your home. 

There are other important criteria you must meet if you want to cancel PMI on your loan:

Your request must be in writing.
You must have a good payment history and be current on your payments.
Your lender may require you to certify that there are no junior liens (such as a second mortgage) on your home.
Your lender can also require you to provide evidence (for example, an appraisal) that the value of your property hasn’t declined below the value of the home when you first bought it. If the value of your home has decreased, you may not be able to cancel PMI.

If you meet these requirements your servicer generally must cancel your PMI when you request it.

So, submit your request in writing. If you don't get resolution, tell them you are going to complain to the CFPB.

[HipGnosis]

See, use; http://www.helpwithmybank.gov/complaints/index-file-a-bank-complaint.html

[SomedayStache]

After further investigation I'm not sure the bank is blowing me off.  They have 30 days to respond to my initial written request for PMI cancellation-so I expect I'll hear something soon.  I've done some investigating and decided that both of the customer service personnel I spoke with were incorrect in separate ways.  This is probably because I got the lowest level of customer service and they didn't really understand the rules they were reading from.  I did ask to speak to a supervisor and was promised a return phone call-which still hasn't happened. So I am a bit miffed about that, but I think the slow wheels of bureaucrazy are probably churning in the background.

After I finished complaining posting on here I spent some time digging around to determine where the 75% number could have come from.  I learned about the Home Owners Protection Act of 1999 (http://www.federalreserve.gov/boarddocs/supmanual/cch/hpa.pdf).  The 75% number should only come into play if I am trying to terminate PMI based on "Current Property Value".  I have reached 80% LTV based on the "Original Property value".

I have also called the bank back and asked them to send me, in writing, the terms required to cancel PMI.  I was hoping for specific numbers regarding my mortgage, but they instead sent me generic terms that correspond with the Home Owners Protection Act.  I think the customer service folk I spoke with were just reading the PMI cancellation terms and getting confused.  I naively thought they would have some hard numbers on the screen in front of them, but based on the phone calls it sounded like they were doing the calculations themselves based on their own interpretation of the terms.  So yeah...

I'll update here when this actually gets resolved.

[SomedayStache]

We got notice that our loan no longer requires PMI and that within 30 days we will receive the new payment information with the reworked escrow amount.  The customer service person who told me I had to get the loan down to 75% was incorrect.

Last week I sent in a certified letter requesting that the PMI be removed.  I'm not sure if this was neccessary or if possibly the earlier letter/principle payment were already being slowly worked.  In either case I'm glad to be done with it.  This was the last 'debt' that I was in a hurry to payoff and now my family can move forward with our other financial goals.

Lessons learned: Request everything in writing - phone calls hold no weight.

[projekt]

Yay! I hope we put your mind at ease while you were waiting for that.