Skip to main content

CFPB Issues Guidance to Servicers on PMI Cancellation
Aug 04, 2015

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. 

Aug 04, 2015
OCC Fines Sterling Bank & Trust $6M Over Mortgage Fraud

Bank, parent company remain under criminal investigation by Justice Department and SEC.

Regulation and Compliance
Sep 27, 2022
Federal Court Shutters Sham Mortgage Relief Operation

FTC, California agency accuse 2 business owners of scam that cost consumers millions of dollars.

Regulation and Compliance
Sep 22, 2022
CFPB Seeks Input On Creating New Mortgage Products

Agency seeks information on refinances, mortgage products to promote competition and support household financial stability.

Regulation and Compliance
Sep 22, 2022
The Fed Raises Interest Rate 0.75% For The 3rd Time

Chairman said housing market may have to go through "a correction" to return to balance.

Regulation and Compliance
Sep 21, 2022
Fed Committee Gathers To Renew Inflation Fight

FOMC expected to announced 0.75% rate hike after 2-day meeting ends Wednesday.

Regulation and Compliance
Sep 20, 2022
MISMO Releases New Reference Model For Public Comment 

Version 3.6 of the MISMO Reference Model includes new data points and structures.

Regulation and Compliance
Sep 19, 2022