Author Topic: Law Question - Cancelling PMI  (Read 7602 times)

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Law Question - Cancelling PMI
« on: August 31, 2015, 03:53:33 PM »
So, long story short, we got PMI last year when we bought our house. We had 10% available and knew we'd be able to pay another 10% down in the coming year.

We're getting the runaround from our mortgage company now though.

We just got it below 80% and they're trying to tell us that they can't cancel it because we don't have a 2 years payment history.

Here's what it says in the 1 page PMI page of our contract regarding cancellation:

Quote
Borrower Requested Cancellation of PMI
You have the right to request that PMI be canceled on or after the following dates:
  • The date the principal balance of your loan is first scheduled to reach 80% of the original value of the property. This date is July 1 2020. For balloon loans with a fixed interest rate and no conditional right to refinance, if applicable, this date may not be reached before the loan matures.
  • The date the principal balance actually (emphasis theirs) reaches 80%of the original value of the property.
"Original value" means the lesser of the contract sales price of the property or the appraised value of the property at the time the loan was closed. If this loan refinances an existing loan secured by the property, "original value" means the appraised value relied on by the lender to approve this loan.

PMI will only be canceled if all the following conditions are satisfied:
  • you submit a written request for cancellation;
  • you have a good payment history
  • you are current on the payments required by your loan; and
  • we receive, if requested and at your expense, evidence satisfactory to the holder of your loan that the value of the property has not declined below its original value, and certification that there are no subordinate liens on the property.

A " good payment history" means no payments 60 or more days past due within two years and no payments 30 or more days past due within one year of the later of (a) the cancellation date, or (b) the date you submit a request for cancellation.


So, again, we paid off 10% within about a year. We are below 80% now. They are saying that they can't remove PMI until we're below 78% because of the above. We tried to explain the difference in the wording of good payment history. They said "within two years" but are trying to hold us to "for two years."

It's nice that my wife has her JD so she's taken plenty of contract courses. They've escalated enough that they're going to be contacting their legal department.

The final reason that I really believe that we're right is he began talking about an ancillary document (we've never seen it) that has a requirement from their investors that a loan be "seasoned" (2 year history of payments) before the PMI is cancelled. This requirement is no where to be found in our contract though. We even said that if it were an addendum that we had signed we would agree. But that's not the case.

What do you all think?

JLee

  • Walrus Stache
  • *******
  • Posts: 5640
Re: Law Question - Cancelling PMI
« Reply #1 on: August 31, 2015, 03:55:38 PM »
I would ask them to show where you had a payment that was 60 or more days past due within two years.

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #2 on: August 31, 2015, 03:57:39 PM »
I would ask them to show where you had a payment that was 60 or more days past due within two years.

Exactly what we kept repeating. They tried saying that they can't cancel because of the investors and I said that isnt my problem. I never signed a contract with them. They did.

And we haven't had any late payments either in case I didn't make that clear.

Mother Fussbudget

  • Pencil Stache
  • ****
  • Posts: 831
  • Age: 57
  • Location: Indianapolis, IN
Re: Law Question - Cancelling PMI
« Reply #3 on: August 31, 2015, 04:06:54 PM »
Tell them if they're not interested in keeping your business, you'll re-finance elsewhere (whether you do nor not). 
I realize you don't want to pay closing costs, etc, but it could be a useful negotiating tactic. 

I just re-fi'd with Pentagon Federal Credit Union to get rid of PMI, but I have only been in my home for 8 months.  And I discovered I'd paid 13 months worth of payments in that short time period.

AZDude

  • Handlebar Stache
  • *****
  • Posts: 1298
Re: Law Question - Cancelling PMI
« Reply #4 on: August 31, 2015, 05:37:52 PM »
Threaten to refinance with another company, including getting a some initial rate numbers. Maybe they will be amenable to removing the PMI if they get to keep your business?

If all else fails, you could actually refinance through another company and be rid of the PMI, but I know that is more hassle than you want.

mr_orange

  • Walrus Stache
  • *******
  • Posts: 5612
  • Age: 40
  • Location: Round Rock, TX
Re: Law Question - Cancelling PMI
« Reply #5 on: August 31, 2015, 05:47:11 PM »
RESPA provides for the ability to submit a "qualified written request" to have them respond formally.  I suggest you try doing that.  These articles from The Mortgage Professor should help:

http://www.mtgprofessor.com/A%20-%20Servicing/is_there_recourse_against_bad_servicing.htm
http://www.mtgprofessor.com/a%20-%20pmi/how_do_i_cancel_pmi_(ii).htm
http://www.mtgprofessor.com/a%20-%20pmi/how_do_i_cancel_pmi_(i).htm

Calling and arguing with the technician on the phone isn't going to help much.  Send them a qualified written request read receipt requested. 

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #6 on: August 31, 2015, 05:48:31 PM »
As to refinancing, I'd said as much and the first CS rep said I'd completely understand that.

I didn't tell the last guy who was a supervisor.

And I've already sent them a written request on 17Aug.

mr_orange

  • Walrus Stache
  • *******
  • Posts: 5612
  • Age: 40
  • Location: Round Rock, TX
Re: Law Question - Cancelling PMI
« Reply #7 on: August 31, 2015, 05:58:00 PM »
Read the articles I sent.  They contain all of the information you need. 

If you have a big beef you can always submit a complaint to HUD.  You may end up getting in a sparring match with them if they claim that the property has decreased in value.  They may want you to obtain an appraisal, which will probably be a waste of money relative to just paying the mortgage down more. 

Skimming through the articles I sent it looks like 75% is your magic number. 

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #8 on: August 31, 2015, 06:01:39 PM »
RESPA provides for the ability to submit a "qualified written request" to have them respond formally.  I suggest you try doing that.  These articles from The Mortgage Professor should help:

http://www.mtgprofessor.com/A%20-%20Servicing/is_there_recourse_against_bad_servicing.htm
http://www.mtgprofessor.com/a%20-%20pmi/how_do_i_cancel_pmi_(ii).htm
http://www.mtgprofessor.com/a%20-%20pmi/how_do_i_cancel_pmi_(i).htm

Calling and arguing with the technician on the phone isn't going to help much.  Send them a qualified written request read receipt requested.

Reading through that, we will definitely look into filing a RESPA. We are also thinking small claims court as an option.

The mortgage professor also talks about a loan needing 2 year history, but that's the thing. Our contract doesn't say that. Only some guideline that the investors give the bank. I don't understand how that is my problem. They could have a contract with their cleaning company that says that I cant terminate my PMI unless I clean the floors for a night. If I didn't sign it then they can't hold me to that.

mr_orange

  • Walrus Stache
  • *******
  • Posts: 5612
  • Age: 40
  • Location: Round Rock, TX
Re: Law Question - Cancelling PMI
« Reply #9 on: August 31, 2015, 06:03:53 PM »
Any solution that doesn't adhere to their canned rules is likely going to require purchasing an appraisal, which is a waste of money.  What is the dollar amount for paying things down another 2%? 

If they're game for waiving it in trade for paying another 2% it seems like a LOT less work to simply comply than it is to fight with them and consume court time over it. 

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #10 on: August 31, 2015, 06:07:37 PM »
Read the articles I sent.  They contain all of the information you need. 

If you have a big beef you can always submit a complaint to HUD.  You may end up getting in a sparring match with them if they claim that the property has decreased in value.  They may want you to obtain an appraisal, which will probably be a waste of money relative to just paying the mortgage down more. 

Skimming through the articles I sent it looks like 75% is your magic number.

They'll automatically remove it at 78%. The guy had the gall to say "well you guys are really close so you can just continue to pay it off aggressively like you have been."

The Fannie Mae 75% is worse than our current situation.

 I won't be surprised if their legal team says "fine but you need to get an appraisal" even though we just bought last year.

In the end, I'm most likely going to re-finance away from this bank ASAP because of this experience and they're shortsighted actions.

We do have the cash on hand but I'm also angry because I've been told literally 3 different things by 3 different reps and now the person from the mortgage servicing group is telling me that my loan needs to be seasoned when my contract says nothing of the sort.

mr_orange

  • Walrus Stache
  • *******
  • Posts: 5612
  • Age: 40
  • Location: Round Rock, TX
Re: Law Question - Cancelling PMI
« Reply #11 on: August 31, 2015, 06:10:17 PM »
Keep in mind that refinancing may not solve your problem.  Loan servicers change and they're all pretty bad. 

I know it sucks and dealing with morons is a terrible use of your time.  It seems far easier to just pay the loan down another 2% and comply.  Refinancing involves a lot of transaction costs and is a bad use of money unless you think you can get a much better rate. 

Don't bite off your nose to spite your face. 

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #12 on: August 31, 2015, 06:12:12 PM »
Any solution that doesn't adhere to their canned rules is likely going to require purchasing an appraisal, which is a waste of money.  What is the dollar amount for paying things down another 2%? 

If they're game for waiving it in trade for paying another 2% it seems like a LOT less work to simply comply than it is to fight with them and consume court time over it.

They have to waive it according to our contract at 78%. It's $3788.27 till 78% as of today (we just threw another $800 at it over the weekend).

I know it's not a ton of money and we could get it together, but it would leave a terrible taste in my mouth. I'm being held hostage by a document that I've never seen and is a "guideline"

In the end, if we paid it off by the end of the year, it would be an extra $300-400, but that doesn't make it right.

mr_orange

  • Walrus Stache
  • *******
  • Posts: 5612
  • Age: 40
  • Location: Round Rock, TX
Re: Law Question - Cancelling PMI
« Reply #13 on: August 31, 2015, 06:19:42 PM »
You don't have to pay it down.  You can hire an appraiser instead and argue that 80% is already satisfied.  If you choose to do this you should allow the lender to select the appraiser so they can't claim that you picked Jimmy The Stretch to do it. 

To me this is a waste of money and you should simply pay it down a bit more. 

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #14 on: August 31, 2015, 06:33:23 PM »
Keep in mind that refinancing may not solve your problem.  Loan servicers change and they're all pretty bad. 

I know it sucks and dealing with morons is a terrible use of your time.  It seems far easier to just pay the loan down another 2% and comply.  Refinancing involves a lot of transaction costs and is a bad use of money unless you think you can get a much better rate. 

Don't bite off your nose to spite your face.

Yeah, I know. My wife and I want to pay the mortgage down quickly anyways. This is a lot of elation (hitting 80%) and then deflation when they told us that it wasn't enough. Then we double checked the contract and disagreed with what the bank thought and now we're here.

I don't think we'd hire an appraiser, and I'm betting the bank comes back with that.

And that's the thing, we've already satisfied the 80%! We're at 79.53% as of today. I sent the paperwork when we were at 79.99%.

Freedom2016

  • Pencil Stache
  • ****
  • Posts: 619
Re: Law Question - Cancelling PMI
« Reply #15 on: August 31, 2015, 11:04:08 PM »
Yes, for sure, removing PMI is an irritating process. We also got the "you need to be at 78% for it to automatically drop" line, which we did not see in our contract documents. In the end it was just sooo much easier to pay the 2% and be done with it. Think about it, it's all going toward principal anyway - you are paying yourselves! This is a much better use of your time and money than paying for an appraisal, or wasting time trying to have your day in court. Seriously. Plug your nose, write the check, and move on with your lives. In my view, this is not worth losing sleep over, regardless of the rightness of your cause!

thd7t

  • Handlebar Stache
  • *****
  • Posts: 1313
Re: Law Question - Cancelling PMI
« Reply #16 on: September 01, 2015, 06:59:02 AM »
Regarding the 24 months without a payment 60 days late, they may make the claim (I don't know how well it would stick) that without 24 months of payments, you can't meet this requirement.  I've also run into all of this and ended up refinancing.

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #17 on: September 01, 2015, 07:24:32 AM »
Regarding the 24 months without a payment 60 days late, they may make the claim (I don't know how well it would stick) that without 24 months of payments, you can't meet this requirement.  I've also run into all of this and ended up refinancing.

That's exactly what they're saying. Apparently it's some sort of guideline requirement from Freddie Mac. That's not my problem though. That's between them and their investors.

Our document says no late payments within 2 years. We haven't. Who cares if I didn't have a mortgage for a year of that time. I can draw a graph of late payments for 2 years before the request and it would just be a straight line at 0.

They describe the 2 year requirement as the loan needing to be seasoned. That requirement isn't in any document that I ever signed.

thd7t

  • Handlebar Stache
  • *****
  • Posts: 1313
Re: Law Question - Cancelling PMI
« Reply #18 on: September 01, 2015, 07:29:50 AM »
Regarding the 24 months without a payment 60 days late, they may make the claim (I don't know how well it would stick) that without 24 months of payments, you can't meet this requirement.  I've also run into all of this and ended up refinancing.

That's exactly what they're saying. Apparently it's some sort of guideline requirement from Freddie Mac. That's not my problem though. That's between them and their investors.

Our document says no late payments within 2 years. We haven't. Who cares if I didn't have a mortgage for a year of that time. I can draw a graph of late payments for 2 years before the request and it would just be a straight line at 0.

They describe the 2 year requirement as the loan needing to be seasoned. That requirement isn't in any document that I ever signed.
You know, I think that my document was worded something like "60 months without a late payment" (it was FHA) instead of "no late payments within 24 months".  Your mortgage's phrasing offers you some leeway on interpretation.

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #19 on: September 01, 2015, 07:32:35 AM »
Regarding the 24 months without a payment 60 days late, they may make the claim (I don't know how well it would stick) that without 24 months of payments, you can't meet this requirement.  I've also run into all of this and ended up refinancing.

That's exactly what they're saying. Apparently it's some sort of guideline requirement from Freddie Mac. That's not my problem though. That's between them and their investors.

Our document says no late payments within 2 years. We haven't. Who cares if I didn't have a mortgage for a year of that time. I can draw a graph of late payments for 2 years before the request and it would just be a straight line at 0.

They describe the 2 year requirement as the loan needing to be seasoned. That requirement isn't in any document that I ever signed.
You know, I think that my document was worded something like "60 months without a late payment" (it was FHA) instead of "no late payments within 24 months".  Your mortgage's phrasing offers you some leeway on interpretation.

FHA is much stricter. I'm glad you agree. I had one CS rep tell me that she agreed with me. The supervisor last night said "I can understand why this is confusing but we're interpreting it differently than you." We let him know that that's great, but we expect them to cancel our PMI immediately.

He's going to discuss with their legal team and come back by the end of the week.

thd7t

  • Handlebar Stache
  • *****
  • Posts: 1313
Re: Law Question - Cancelling PMI
« Reply #20 on: September 01, 2015, 08:12:44 AM »
Regarding the 24 months without a payment 60 days late, they may make the claim (I don't know how well it would stick) that without 24 months of payments, you can't meet this requirement.  I've also run into all of this and ended up refinancing.

That's exactly what they're saying. Apparently it's some sort of guideline requirement from Freddie Mac. That's not my problem though. That's between them and their investors.

Our document says no late payments within 2 years. We haven't. Who cares if I didn't have a mortgage for a year of that time. I can draw a graph of late payments for 2 years before the request and it would just be a straight line at 0.

They describe the 2 year requirement as the loan needing to be seasoned. That requirement isn't in any document that I ever signed.
You know, I think that my document was worded something like "60 months without a late payment" (it was FHA) instead of "no late payments within 24 months".  Your mortgage's phrasing offers you some leeway on interpretation.

FHA is much stricter. I'm glad you agree. I had one CS rep tell me that she agreed with me. The supervisor last night said "I can understand why this is confusing but we're interpreting it differently than you." We let him know that that's great, but we expect them to cancel our PMI immediately.

He's going to discuss with their legal team and come back by the end of the week.
Glad this will be resolved quickly.  You might ask to record the conversations.  Having people agree with you or even discuss interpretation could work to your advantage.

We bought in '09 and there most PMI had been frozen, so a conventional mortgage wasn't available to us with a 10% downpayment.  Looking back, we should have waited to buy and avoided MI, but we were just learning.  However, that was before the rules on FHA mortgages really got strict.  They just had a longer required period of insurance than conventional ones.

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #21 on: September 01, 2015, 08:32:38 AM »
We bought in '09 and there most PMI had been frozen, so a conventional mortgage wasn't available to us with a 10% downpayment.  Looking back, we should have waited to buy and avoided MI, but we were just learning.  However, that was before the rules on FHA mortgages really got strict.  They just had a longer required period of insurance than conventional ones.

Our PMI was calculated. We knew we would have the extra 10% in a year, but really didn't want to have to up and move again. We've paid about $1200 into it so far, are nicely settled into our home, and don't have to move at all. That's well worth the money for me. I'm just pissed since they won't let me get out now! At least I'll never have to deal with this again.

Cathy

  • Handlebar Stache
  • *****
  • Posts: 1046
Re: Law Question - Cancelling PMI
« Reply #22 on: September 01, 2015, 08:43:29 AM »
It's impossible to engage in contract interpretation without reviewing the entire contract including every ancillary document you may have signed, and without knowing the jurisdiction in which you live.

However, I am still going to reply to this thread, because you and wife are misunderstanding what the text you quoted means (emphasis added):

...You have the right to request that PMI be canceled on or after the following dates:
  • ....
...

PMI will only be canceled if all the following conditions are satisfied:
  • ...

What the second provision says is that the only case where your request to cancel PMI will be granted is if all the conditions stated are satisfied. However, nothing in the text you quoted says that the lender must cancel PMI if those conditions are satisfied. It clearly says "only ... if", not plain "if". The conditions listed are necessary conditions, not sufficient ones. This interpretation is bolstered by the fact that the first provision says you have "the right to request" that PMI be cancelled, as opposed to a freestanding right for PMI to be cancelled if conditions are satisfied.

As a matter of literal English, this text vests the lender with a discretion of whether to grant your request even if all the conditions are satisfied. The general rule is that discretion under a contract must be exercised in good faith, but exercising that discretion to avoid violating an agreement the lender has with investors is probably an example of good faith.

Here are some reasons why the entire contract and the jurisdiction matters:

  • After reviewing the entire contract, it may be possible to make an argument that "only ... if" is not to be read literally in your contract. For example, there may be clauses where the literal meaning would be absurd, casting into doubt whether it is meant literally throughout. Also, there may be a general set of clauses setting forth rules as to how the contract should be interpreted, and some of those rules may give you arguments you can use.
  • Your state's statutes or case law may contain relevant rules that change the interpretation of this contract from the literal interpretation to something more favourable to you.

The general rule is that courts apply contracts as they are written, as opposed to how a party wishes it had been written, but there are various exceptions to that rule that you would have to research.

I am mainly commenting because it's clear you did not understand the meaning of the English in the text, and that was worth pointing out. However, please note that this post is general information only and you cannot rely on this post as advice for any purpose.
« Last Edit: September 01, 2015, 08:50:13 AM by Cathy »

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #23 on: September 01, 2015, 09:00:28 AM »

I am mainly commenting because it's clear you did not understand the meaning of the English in the text, and that was worth pointing out. However, please note that this post is general information only and you cannot rely on this post as advice for any purpose.

Well, I'm going to first say I appreciate your comment even though your delivery leaves a lot to be desired.

But back to your comment, my wife and I did notice this yesterday. I didn't mention it on here, but you're right. The contract doesn't say that they have to cancel it even if we meet all 4 of those criteria. But that's the thing, they're telling me that I don't meet the 4 criteria when I absolutely do. And they're referencing another guideline which is not part of the contract that I signed. They're stating that the reason they can't cancel the PMI is because my loan isn't seasoned according to a guideline from the investors.

"The general rule is that courts apply contracts as they are written, as opposed to how a party wishes it had been written" - exactly. I understand what the bank was intending when writing this but it's not. They're stretching it and trying to redefine the contract using extra documents which we never agreed to.

Cathy

  • Handlebar Stache
  • *****
  • Posts: 1046
Re: Law Question - Cancelling PMI
« Reply #24 on: September 01, 2015, 09:02:25 AM »
Just because their non-lawyer customer service representatives are using a bogus argument doesn't mean that when you get to court, their actual lawyers will use the same bogus argument. They may instead use a winning argument, possibly such as the one I mentioned.

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #25 on: September 01, 2015, 09:06:59 AM »
Just because their non-lawyer customer service representatives are using a bogus argument doesn't mean that when you get to court, their actual lawyers will use the same bogus argument. They may instead use a winning argument, possibly such as the one I mentioned.

I think the best way to look at it would be that if my PMI  got cancelled, I must have met those 4 requirements. That's where the only if comes in.

Again, I appreciate you reminding me about this part of it, I just don't like the internet-tone that you used and the assumptions that my wife and I didn't understand it (although the fact that we realized it later at night and i never updated on here doesn't help you understand where I'm coming from).

I meet all 4 criteria, and I'm being told that I don't. This is wrong.

On top of all of this, I fully expect them to come back and say that I'd have to have a home appraisal as the next step because they can.

Cathy

  • Handlebar Stache
  • *****
  • Posts: 1046
Re: Law Question - Cancelling PMI
« Reply #26 on: September 01, 2015, 09:10:35 AM »
I meet all 4 criteria, and I'm being told that I don't. This is wrong.

This may be wrong, but it's unlikely to be creating any estoppel that would prevent the lender from raising a meritorious argument in court. When you analyse a legal problem, you have to consider the best arguments that your adversary could make -- not necessarily the arguments that their low level customer service representatives are actually making.

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #27 on: September 01, 2015, 09:13:06 AM »
I meet all 4 criteria, and I'm being told that I don't. This is wrong.

This may be wrong, but it's unlikely to be creating any estoppel that would prevent the lender from raising a meritorious argument in court. When you analyse a legal problem, you have to consider the best arguments that your adversary could make -- not necessarily the arguments that their low level customer service representatives are actually making.

I agree completely. We're 99% not going to be going to court over this. I'll still file a RESPA and maybe BBB. Maybe it'll make it clearer for any people who get PMI in the future and want to pay it off quickly.

partgypsy

  • Magnum Stache
  • ******
  • Posts: 3409
Re: Law Question - Cancelling PMI
« Reply #28 on: September 01, 2015, 09:18:42 AM »
Calculate the cost of a) how much pay in pmi to get to 78% value, b) appraisal cost (usually 300-400), and going to court (which you may or may not win). Decide on best course of action.

I agree that you do fufil the criteria, and there is nowhere that is says a minimum of 24 months of payment needs to be made before PMI is waived. However I also know they HATE to remove the PMI and will stall and bounce your around, make additional criteria etc and make this a thorn in your side until you fall below 78%. I would do the least expensive, least hassle course of action.

Cathy

  • Handlebar Stache
  • *****
  • Posts: 1046
Re: Law Question - Cancelling PMI
« Reply #29 on: September 01, 2015, 09:21:52 AM »
I agree completely. We're 99% not going to be going to court over this. I'll still file a RESPA and maybe BBB. Maybe it'll make it clearer for any people who get PMI in the future and want to pay it off quickly.

I agree that it's worth continuing to deal with the lender and seeing if you can persuade them to cancel PMI even if they don't have to cancel it. I was just concerned that you were taking legal steps based on a misunderstanding of the text. I apologise for assuming that was the case without qualification.

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #30 on: September 01, 2015, 09:22:16 AM »
Calculate the cost of a) how much pay in pmi to get to 78% value, b) appraisal cost (usually 300-400), and going to court (which you may or may not win). Decide on best course of action.

I agree that you do fufil the criteria, and there is nowhere that is says a minimum of 24 months of payment needs to be made before PMI is waived. However I also know they HATE to remove the PMI and will stall and bounce your around, make additional criteria etc and make this a thorn in your side until you fall below 78%. I would do the least expensive, least hassle course of action.

Yep. By the time we would even get the appraisal, we'd probably be another month in and another $81.84 down the drain. On top of that, lowering the principal is in line with our goals of early mortgage payoff. I'm glad you agree with me and looking through the mortgage professor link, it makes me even more frustrated that this is a systemic problem. I'm probably going to have to just eat it, especially considering that my wife is due in a week.

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #31 on: September 01, 2015, 09:24:10 AM »
I agree completely. We're 99% not going to be going to court over this. I'll still file a RESPA and maybe BBB. Maybe it'll make it clearer for any people who get PMI in the future and want to pay it off quickly.

I agree that it's worth continuing to deal with the lender and seeing if you can persuade them to cancel PMI even if they don't have to cancel it. I was just concerned that you were taking legal steps based on a misunderstanding of the text. I apologise for assuming that was the case without qualification.

No problem. You pointed out something that was glaring at us last night and I should have brought it up. I'm sure their legal team will notice the same thing. We're just hoping they get scared and cancel it for us, but I'm sure that won't happen. In the end, they're losing a customer and a lot more money if I re-finance and I'll be sure to explain why I'm leaving.

gReed Smith

  • Stubble
  • **
  • Posts: 170
Re: Law Question - Cancelling PMI
« Reply #32 on: September 01, 2015, 09:29:00 AM »
Threaten to report them to the appropriate people at your state attorney general's office.  They will shit.  Banks don't like AGs.

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #33 on: September 01, 2015, 10:28:05 AM »
Threaten to report them to the appropriate people at your state attorney general's office.  They will shit.  Banks don't like AGs.

That's the plan next time I talk to them. I'll let them know that I'll be filing a RESPA and sending a letter to the AG. Worth the postage stamp to me.

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Law Question - Cancelling PMI
« Reply #34 on: September 04, 2015, 09:23:47 AM »
Bam! I made enough noise.

They're asking that I send another cancellation request (mailed it out the afternoon they called) but they're removing it. I'm glad they resolved the situation and I won't be as quick to refinance now. In the end, I argue that I paid an extra month and a half of PMI, but this is better than needing another appraisal or having to wait it out a few more months and shift around a few grand that we had earmarked for other things.

Thanks for all the info/conversation.