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HELP! Bank won't remove PMI!!! (requirements, rate, guidelines, lender)

02-21-2010, 10:57 AM
 

3,565 posts, read 5,235,084 times

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Quote:

Originally Posted by dazzleman

What is your current value? Your bigger problem now is that the house is probably worth well less than it was when it was appraised for $161K in 11/05. With the lower current value, you might not have enough equity to drop PMI.

Bingo! I doubt they can refinance (without bringing more money to the table to lower the loan value to less than 80%) because of depressed home values form peak 2005 prices. Plus appraisals are stricter now. To the OP, I understand about you wanting to control what goes into the escrow (thus avoiding the PMI).

But you need to thread carefully. You need to ask the bank (or look into your contract). What's their stipulation about getting PMI removed? Do they need to reappraise the home again. Since the last appraisal was done in 2005 at or near the peak of the bubble in most areas of the country.

Reply With Quote Quick reply to this message 02-21-2010, 12:43 PM
 

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Quote:

Originally Posted by bigdaddyluv

We built our house in 11/03 for $125000. Back on 11/05 we requested to drop PMI. We went through the bank's "required" appraiser, who then appraised it at $161000. Bank then stated our balance had to be at/below $120750 (75% LTV) because it was between years 2-5 of the loan. Just last month (just beyond our 5 years which the required balance changed to 80% LTV) we asked that our PMI be dropped. The balance on the loan was now 121000. They again refused because we were late the last few months (but we had never been late prior to this time for 5 years!) The reason we were late was because the taxes & ins went up on our property, which is all bundled in our monthly payment, bringing it over $1000/mo. Our actual mortgage pymnt is only about $675, easily affordable. We have an ARM but the rates are very good even when topped out; we're at 4.75% now. Is there anything we can do to get them to drop the PMI? Our bank requires that if we drop PMI, they will also drop the taxes & hazard, which is fine with us because the bank always pays it at the last minute, requiring a bigger payment (county gives discount for early payment). These "extras" are what's killing us...not the actual mortgage. Every time we talk with the bank, they are not helpful and just keeping read their script to us. If it makes any difference, the loan is through a credit union.

Do you have a FHA loan? If you do, then the regular LTV below 80% and 24 months good payment history does not apply to you. Just something to think about... Mortgage Company's won't remove MIP or mortgage insurance premium this is something most of you had to hear when u applied for removal of MIP from your FHA loans. And if by any chance your loan closed on Jan 1, 2001. Then, there are only two ways to remove mortgage insurance that either you pay off the whole loan or refinance your loan. Generally FHA loans don't have a PMI or private mortgage insurance but rather they have MIP and at the same time is less expensive monthly. The borrower can pay for MIP either at closing or monthly along with other mortgage payments. As per the FHA regulations, borrowers whose loan closed after Jan. 1, 2001, if the upfront premium is already paid, then the MIP will come off once the loan to value reaches 78% depending on the initial purchased price/value of the home and the principal payments that were made against the loan. And if the borrower didn't pay any upfront MIP, then you cannot get a removal from the MIP of your loan. In this situation refinancing is an option that can be considered, but that is also applicable if your home's value has gone up enough that you are allowed to take up conventional financing without any PMI. If any of below mentioned conditions applies for you then u can get a MIP removal from your FHA loan: 1. Your MIP can be cancelled if you have if your mortgage terms more than 15 years and the loan to value ratio goes to 78%, with condition that you have paid annual mortgage insurance premium for a minimum of 5 years. 2. If your mortgage with period of 15 years or less and having a loan to value ratio of 90% or more your MIP can be cancelled if the loan to value ratio goes to 78%, the time for which mortgagor has given the annual mortgage premiums doesn't matter here. 3. If your mortgage with period of 15 years or less and having a loan to value ratio of 89.99% or less you wont be charged any annual MIP. Though, your mortgage will be canceled as mention above, but the insurance contract will remain in effect for its complete term.

It's the decision of FHA which will decide when the borrower has reached the given mark of loan to value ration on the basis of lower on the sale price or appraised value at the time of origination. Appraised value which is new will not be considered in any case.

Reply With Quote Quick reply to this message 07-16-2010, 09:09 AM
 

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Default Having (almost) Same Problem Here... What To Do???? I ran across this forum post searching for ways to combat this problem. I too have a mortgage with Chase (conventional 30 year fixed rate loan) with NO late payments EVER! Have had it for 7 years now. When first requesting our PMI removal, chase informed us to get an appraisal, which we did. Our request was denied because we were at just a few hundred dollars over 80%. The letter we received specifically stated it needed to be 80% and exactly what the priniciple balance should be. The gave us a time frame to pay it down and put in another request. We did all this, everything was in order and we followed their requirements exactly. And our request was once again denied but this time they say it needs to be 65% - with no explanation why it would change or why they didn't tell us to begin with. By this time we've paid extra on our principle and paid for appraisal. What can we do?? Natalie

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Last edited by Green Irish Eyes; 07-16-2010 at09:45 AM ..

Reply With Quote Quick reply to this message 07-16-2010, 09:40 AM
 

Location: Laguna Niguel, CA

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On conventional loans, PMI removal procedures are left completely up to the lender. There is no requirement for them to ever remove PMI as far as I know - this is why it's a common misconception that starting at 95% LTV with an FHA loan vs. 95% LTV with a conventional loan, with modest appreciation, PMI will be removed sooner with conventional than with FHA. Still, most lenders will drop the PMI on conventional after you pay it for a couple years and if you have 20% equity (per an appraisal paid by you) at the time of the request.

nhinnen, it appears that perhaps Chase made a judgment call that you were in a declining market and figured even if you have the 20% equity now, very shortly after you wouldn't and therefore is requiring more than 20% equity in order for the PMI to be removed. Policies/requirements change all of the time, and I don't believe you have the right to know why their policies changed, just what they have changed to and when they did change. Now if the requirement was 65% all along, and you were told it was 80%, and then acted based on their information... I think they'd be at least required to reimburse you for the additional appraisal you paid. I'd call up, don't tell them it's "you", and ask when their policy changed from requiring 20% equity to 35% equity. If it was after you attempted to remove PMI the first time, but before you attempted to remove PMI the 2nd time, then it sounds like you were just caught in the middle of a guideline change.

Reply With Quote Quick reply to this message 07-16-2010, 08:32 PM
 

Location: MID ATLANTIC

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Guidelines are constantly changing, for servicing as well as, new loans. The only hard and fast rule is for when the loan is paid down to 78% of the original value. If you are late with your payments, that can negate any requirements. I suspect we will see this requirement to change, according to market conditions.

Seriously, refinance if you can, but I suspect the OP cannot, due to declining values. It will most likely be a while, values are expected to continue to decline over the next 12 months.

Reply With Quote Quick reply to this message 07-23-2010, 03:41 PM
 

Location: Birmingham, Alabama

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We bought our home in February 2004, pretty darn close to the peak in our area of Birmingham, AL metro. I think we actually paid a little more, like $2,000 more, than any home on our street had sold for previously. We thought this was pretty rational considering the property has the largest sq ft of actual real estate in the neighborhood. The appraisal was where it should be, naturally, considering the time we were in. I've been paying PMI on the note since that time, and it's around $100 extra bucks per month. I've thought of applying to get the mortgage reworked, not because I think property values have sunk, but because we've paid this long, put zero down, and never had a hiccup in the payment status. I think, after 7 years, with virtually no appreciation, maybe slight, and a good payment history, things should be looked at again. Are loan mods only done on homes in risk of foreclosure? The refi would be expensive otherwise, and I don't know that we want to stay in the property that much longer. However, due to our job losses of the past couple years, we wouldn't be able to buy again, with 20% down, anytime soon.

Sometimes, I just sit back and say "don't rock the boat. Don't try to improve a situation that isn't broke".

Reply With Quote Quick reply to this message 07-23-2010, 05:04 PM
 

Location: New York

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Quote:

Originally Posted by ShanetheMortgageMan ....PMI removal procedures are left completely up to the lender. There is no requirement for them to ever remove PMI as far as I know.....

nhinnen - if the requirement was 65% all along, and you were told it was 80%, and then acted based on their information... I think they'd be at least required to reimburse you for the additional appraisal you paid....


Shane - you hit a sore spot as I was reading your post. From the time we brought our home until the time we refinanced. The value of our home went up. My LTV was 24% and I was still paying PMI. It was an expensive lesson for me. Their was no one I could speak to about all the years I paid the PMI charge where I didn't have to. We brought our house in 1992, financing 90% with Washington Mutual. In early 2002 started questioning why my PMI had not dropped of. I contacted W.M. and they said it was the borrowers responsibility to notify them. WM wanted us to use their appraisal company to appraise our home. Their appraisal fee was $750, which I thought was excessive. After the fact - in 2002 refinanced into a 240mth loan, saving money by consolidating bills. We also were able to drop our PMI. Rhinnen - I agree with Shanes statement. If you were told it was 80%, they should honor that. If by chance you have the original loan note, there might be a paragraph explaining when the PMI is to drop off. G.L.

..

Reply With Quote Quick reply to this message 09-28-2011, 10:55 AM
 

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Default Response to Shane the Mortgage Man

Any time someone is taking my money, I absolutely have a right to know of ANY policy changes.

Reply With Quote Quick reply to this message 09-30-2015, 09:57 PM
 

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Do I get to count back to the original date of the loan existence when the notes been sold a few times? I have NationStar and they don't move an inch. I've sent in paperwork and sent many emails. Now I just requested the paperwork again. My purchase price/loan amount was $99,000 and had mortgage insurance in the payment. I streamlined once after that in 2009 to lower my interest rate but my note has sold once or twice since then. My loan balance is now $92,000 and my value is $165,000 or higher so I am well withing the LTV requirements and I can't get Nationstar to respond! What to do!!!???

Reply With Quote Quick reply to this message 09-30-2015, 11:55 PM
 

Location: Phoenix, AZ area

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Quote:

Originally Posted by ellie_b6

Do I get to count back to the original date of the loan existence when the notes been sold a few times? I have NationStar and they don't move an inch. I've sent in paperwork and sent many emails. Now I just requested the paperwork again. My purchase price/loan amount was $99,000 and had mortgage insurance in the payment. I streamlined once after that in 2009 to lower my interest rate but my note has sold once or twice since then. My loan balance is now $92,000 and my value is $165,000 or higher so I am well withing the LTV requirements and I can't get Nationstar to respond! What to do!!!???

The streamline date would be the date you use. The LTV needs to be 78% of the value at time of purchase, if they did an appraisal when you streamlines (not common) then you would use that for your LTV but if they didn't it would be the last appraisal

done. You can try to refi with a new lender, and might be your best option, since rates are much better now than in 2009 but you would have to qualify. Otherwise you have to hit 78% LTV and 5 years of the loan, part 2 is met if you streamlined in 2009 but with a $92k balance part 1 is far off. Reply With Quote Quick reply to this message Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

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Page 2

10-01-2015, 06:40 AM
 

Location: MID ATLANTIC

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Quote:

Originally Posted by ellie_b6

Do I get to count back to the original date of the loan existence when the notes been sold a few times? I have NationStar and they don't move an inch. I've sent in paperwork and sent many emails. Now I just requested the paperwork again. My purchase price/loan amount was $99,000 and had mortgage insurance in the payment. I streamlined once after that in 2009 to lower my interest rate but my note has sold once or twice since then. My loan balance is now $92,000 and my value is $165,000 or higher so I am well withing the LTV requirements and I can't get Nationstar to respond! What to do!!!???

When you say streamline, what kind of loan do you have? Some loans can never shed PMI. The guidelines state the lender must have a written policy for removing PMI when it is allowed (if it is allowed) prior to reaching 78% of the original loan amount.. There is nothing stated they have to allow the removal prior to that time, only that they have a written policy in place. Reply With Quote Quick reply to this message

Page 3

12-23-2008, 10:47 AM
 

242 posts, read 591,842 times

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Quote:

Originally Posted by bigdaddyluv

We built our house in 11/03 for $125000. Back on 11/05 we requested to drop PMI. We went through the bank's "required" appraiser, who then appraised it at $161000. Bank then stated our balance had to be at/below $120750 (75% LTV) because it was between years 2-5 of the loan. Just last month (just beyond our 5 years which the required balance changed to 80% LTV) we asked that our PMI be dropped. The balance on the loan was now 121000. They again refused because we were late the last few months (but we had never been late prior to this time for 5 years!) The reason we were late was because the taxes & ins went up on our property, which is all bundled in our monthly payment, bringing it over $1000/mo. Our actual mortgage pymnt is only about $675, easily affordable. We have an ARM but the rates are very good even when topped out; we're at 4.75% now. Is there anything we can do to get them to drop the PMI? Our bank requires that if we drop PMI, they will also drop the taxes & hazard, which is fine with us because the bank always pays it at the last minute, requiring a bigger payment (county gives discount for early payment). These "extras" are what's killing us...not the actual mortgage. Every time we talk with the bank, they are not helpful and just keeping read their script to us. If it makes any difference, the loan is through a credit union.

I would go over the loan docs about the PMI. I would then contact state regulators and possibly the national regulator depending on the lender. This has always been an issue with lenders. The 5 year thing is a lie. They say time limit, they say re-appraisal, they go on and on. And through it all you keep paying them (yes them) PMI and it is profit for them. Contact at a minnimum your state. I am probably right when I say they have only discussed this on the phone. I would send a detailed letter via registered mail demanding it be dropped, citing previous calls.

I would definitely make a claim against the lender with my state or federal authority. When they do finally adjust it, I would look to small claims to get your money spent for the 5 year lie back.

Reply With Quote Quick reply to this message 12-23-2008, 10:59 AM
 

Location: Denver, CO

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I didn't read the post super closely, but I though PMI could be dropped as soon as you had 20% equity built up? am I wrong? I wasn't aware that a few days' late payment could affect that. Of course, no one likes it when bills are late, but a few days??

Reply With Quote Quick reply to this message 09-10-2009, 10:57 PM
 

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no you can request removal of PMI at 80%.The law is stupid and was writen by banks and then signed into law so the law makers can look like they are doing something. It is a totaly worthless law...The good thing is that all the PMI you pay once at 80% LTV will be paid back when PMI is terminated.The law does have a 78% automatic removal in it...but here is the dorked out part...it is on the date that the originaly shedualed load will hit 78%...so even if you pay down to 78% you are still f'd untill the day that it will hit 78% if you just made your normal payments.So...what is a guy to do...well, once your load is at 80% you can request the removal. DO THIS IN WRITING NOT ON THE PHONE...each day put 2 or 3 letters in the mail and eventually they will understand that you are not going away. Oh, and a mail box never put me on hold or talked to me in an indian accent...stupid banks can all suck it

Reply With Quote Quick reply to this message 09-11-2009, 06:57 AM
 

Location: Fuquay Varina

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Quote:

Originally Posted by allforcats

Not "everyone", of course, but do you see the lender's point of view? Your late payments are RECENT and are huge red flags to the lender, warning them that you, too, look as though you will soon be defaulting on your mortgage.

I agree, and honestly I am curious why the OP is so upset when he admits they have been late recently. If I were the bank I would be worried about releasing the PMI as well.

I think the best advice has already been given here, refinance or make timely payments for a year and try again.

Reply With Quote Quick reply to this message 09-11-2009, 08:07 AM
 

Location: I think my user name clarifies that.

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Quote:

Originally Posted by bigdaddyluv

We built our house in 11/03 for $125000. Back on 11/05 we requested to drop PMI. We went through the bank's "required" appraiser, who then appraised it at $161000. Bank then stated our balance had to be at/below $120750 (75% LTV) because it was between years 2-5 of the loan. Just last month (just beyond our 5 years which the required balance changed to 80% LTV) we asked that our PMI be dropped. The balance on the loan was now 121000. They again refused because we were late the last few months (but we had never been late prior to this time for 5 years!) The reason we were late was because the taxes & ins went up on our property, which is all bundled in our monthly payment, bringing it over $1000/mo. Our actual mortgage pymnt is only about $675, easily affordable. We have an ARM but the rates are very good even when topped out; we're at 4.75% now. Is there anything we can do to get them to drop the PMI? Our bank requires that if we drop PMI, they will also drop the taxes & hazard, which is fine with us because the bank always pays it at the last minute, requiring a bigger payment (county gives discount for early payment). These "extras" are what's killing us...not the actual mortgage. Every time we talk with the bank, they are not helpful and just keeping read their script to us. If it makes any difference, the loan is through a credit union.


First of all, remember that the bank is NOT your friend!
They exist to make money off you. That is all! And if your mortgage is through anybody but a local bank, you're pretty much screwed regarding any kind of service. How much - exactly - is your monthly PMI payment? We had PMI for awhile, after we bought a house, but it was only $24 per month. Granted, money is money, but that's not a deal-breaker. Also, is it possible that you're confusing Escrows with PMI? Your tax & insurance escrows are going to remain the same whether or not you have a PMI payment. 1. I'd do some checking around to see exactly what the law requires of the bank, regarding PMIs.

2. I'd strongly suggest you get some competitive quotes from insurance companies other than the one who carries your homeowners policy. Let your current provider know you're shopping around, and force them to sharpen their pencils.

Reply With Quote Quick reply to this message 09-15-2009, 04:14 PM
 

Location: New York

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.

Quote:

Originally Posted by Omaha Rocks


First of all, remember that the bank is NOT your friend!
They exist to make money off you. That is all! And if your mortgage is through anybody but a local bank, you're pretty much screwed regarding any kind of service.


Very true statement!!!!!!........ Reply With Quote Quick reply to this message 02-19-2010, 08:46 PM
 

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well. i'm tired of payimg the pmi for almost 5 yrs, I did all they requiered (CHASE BANK), I do understand the times, BUT I do not need to insure No Invester. I think I proved myself that I can make my payments.
Call the Mob Off.

Reply With Quote Quick reply to this message 02-20-2010, 11:37 PM
 

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Oh, those big bad banks. PMI is not required. Just put 20% or more down. Don't have 20% down...then either save it up, don't buy, or buy with PMI and don't whine about it.

Reply With Quote Quick reply to this message 02-21-2010, 08:37 AM
 

Location: Fairfield, CT

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Quote:

Originally Posted by bigdaddyluv

We built our house in 11/03 for $125000. Back on 11/05 we requested to drop PMI. We went through the bank's "required" appraiser, who then appraised it at $161000. Bank then stated our balance had to be at/below $120750 (75% LTV) because it was between years 2-5 of the loan. Just last month (just beyond our 5 years which the required balance changed to 80% LTV) we asked that our PMI be dropped. The balance on the loan was now 121000. They again refused because we were late the last few months (but we had never been late prior to this time for 5 years!) The reason we were late was because the taxes & ins went up on our property, which is all bundled in our monthly payment, bringing it over $1000/mo. Our actual mortgage pymnt is only about $675, easily affordable. We have an ARM but the rates are very good even when topped out; we're at 4.75% now. Is there anything we can do to get them to drop the PMI? Our bank requires that if we drop PMI, they will also drop the taxes & hazard, which is fine with us because the bank always pays it at the last minute, requiring a bigger payment (county gives discount for early payment). These "extras" are what's killing us...not the actual mortgage. Every time we talk with the bank, they are not helpful and just keeping read their script to us. If it makes any difference, the loan is through a credit union.

What is your current value? Your bigger problem now is that the house is probably worth well less than it was when it was appraised for $161K in 11/05. With the lower current value, you might not have enough equity to drop PMI. Reply With Quote Quick reply to this message 02-21-2010, 08:39 AM
 

Location: Fairfield, CT

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Quote:

Originally Posted by npastiu

well. i'm tired of payimg the pmi for almost 5 yrs, I did all they requiered (CHASE BANK), I do understand the times, BUT I do not need to insure No Invester. I think I proved myself that I can make my payments.
Call the Mob Off.

PMI is based on loan-to-value, not your ability to make payments. Plenty of people were able to make payments yesterday, but not today. If you don't have an LTV ratio of under 80%, you can't expect the bank to agree to drop PMI just because you've made payments reliably.

I'm sure that when you bought, you were given the line by your mortgage broker that the PMI would be temporary because the value would keep increasing by 20% per year, so you'd soon have enough equity to drop it. It didn't work out that way.

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