Private Mortgage Insurance: Cancellation Options (CRS Report for Congress)
| Release Date |
Revised Feb. 15, 2001 |
| Report Number |
97-373 |
| Authors |
Bruce E. Foote, Economics Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Premium Dec. 17, 1997 (6 pages, $24.95)
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Summary:
If home mortgage borrowers are unable to make downpayments of at least 20 percent, lenders generally require that the borrowers obtain some type of mortgage insurance. In response, the borrowers either obtain private mortgage insurance (PMI) from mortgage insurers or, when eligible, insurance from a federal government agency. In recent years, the majority have obtained PMI. The Homeowners Protection Act of 1998, P.L. 105-216, requires disclosure of the right to cancel mortgage insurance. The act requires lenders to terminate PMI upon written request by borrowers whose loan balances have reached 80 percent of the original property value, and it provides for mandatory cancellation once the loan balance reaches 78 percent of the original value of the property securing the loan.
