Skip to main content

CFPB Issues Guidance to Servicers on PMI Cancellation

NationalMortgageProfessional.com
Aug 04, 2015
CFPB Logo

The Consumer Financial Protection Bureau (CFPB) has issued a bulletin providing guidance to mortgage servicers regarding the cancellation and termination of private mortgage insurance (PMI). The bulletin explains certain requirements of the Homeowners Protection Act and is intended to help servicers comply with the law. 

“Consumers should not be billed for unnecessary private mortgage insurance,” said CFPB Director Richard Cordray. “We will continue to supervise mortgage servicers to ensure they are treating borrowers fairly, and today’s guidance should help servicers come into compliance with the Homeowners Protection Act.” 

PMI protects the lender if the borrower stops making payments on a loan. Lenders generally require consumers to purchase PMI if their down payment is less than 20 percent of the sales price or the appraised value of the home. PMI premiums are added to the borrower’s monthly mortgage payment. The Homeowners Protection Act of 1998 was passed by Congress to address borrowers’ difficulties in cancelling private mortgage insurance when they had reached a certain level of equity in the property. 

Private mortgage insurance can be expensive for consumers, and the Homeowners Protection Act provides specific cancellation and termination rights. If a servicer does not cancel a borrower’s PMI promptly, it can lead to the borrower paying significant amounts of money on unnecessary premiums. 

The CFPB has identified substantial industry confusion over implementation of the PMI cancellation and termination requirements in the Homeowners Protection Act. Examinations by the CFPB have identified violations of several different provisions of the Act.  The CFPB discussed a number of Homeowners Protection Act violations in the Summer 2013, Winter 2013, and Summer 2015 issues of Supervisory Highlights. 

Published
Aug 04, 2015
Feds Reviewing Appraisal Standards, Qualifications

Appraisal Subcommittee said requirements are being reviewed to determine whether they ensure and promote fairness, equity, objectivity, and diversity, in both appraisals and in the training and credentialing of appraisers.

Regulation and Compliance
Oct 20, 2021
​​​​​​​FHFA OK's Desktop Appraisals, Expands Refi Criteria

The Federal Housing Finance Agency (FHFA) said Monday it will take two steps to help make home ownership more affordable and sustainable for mortgage borrowers, especially for those in underserved communities. 

Regulation and Compliance
Oct 19, 2021
CFPB Names 4 To Key Senior Positions

The appointees include two who helped create the bureau and two who served on the CFPB staff during the Obama administration.

Regulation and Compliance
Oct 14, 2021
FHFA Raises Enterprises' Multifamily Loan Purchase Caps

The Federal Housing Finance Agency (FHFA) said the 2022 multifamily loan purchase caps will be $78 billion for each Enterprise, for a combined total of $156 billion to support the multifamily market.

Regulation and Compliance
Oct 13, 2021
CFPB Hits AAG With Complaint For Deceptive Marketing Of Reverse Mortgages

The Consumer Financial Protection Bureau filed a complaint and proposed consent order, which alleges that American Advisors Group (AAG) used inflated and deceptive home estimates to attract reverse mortgage consumers.

Regulation and Compliance
Oct 12, 2021
Waterstone Mortgage Names VP Of Compliance

Waterstone Mortgage Corporation named Kris Barros as the company's vice president of compliance.

Community
Oct 08, 2021