Cancel private mortgage insurance (PMI) when you have enough equity
12 U.S.C. § 4902(a)
In plain words
If you pay private mortgage insurance on a loan for your main home, you can ask in writing to cancel it once your balance reaches 80% of the home's original value, if you have a good payment history and are current. It must end automatically when your balance is scheduled to reach 78%, if you are current.
Who is protected
Borrowers paying private mortgage insurance on a home loan for their principal residence made on or after July 29, 1999.
When it applies
- Only for conventional loans.
- Only if the home is your primary residence.
- Does not cover FHA mortgage insurance premiums or VA/USDA guarantee fees, which follow their own rules.
What you can do
Ask your servicer to cancel PMI
Write to the servicer asking to cancel PMI. Ask what proof it needs (for example, that the home has not lost value).
Honest limits
- You must be current and have a good payment history; the holder may require proof the home's value has not dropped.
- High-risk loans can have different rules.
- This is general legal information, not legal advice, and it does not promise any result. A HUD-approved housing counselor or a lawyer can look at your facts.
The law
- Federal lawHomeowners Protection Act — borrower cancellation
12 U.S.C. § 4902(a)
Exact part: (a)
What it says: PMI must be canceled at the borrower's written request once the cancellation date is reached and the conditions are met.
Read the official texthttps://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4902&num=0&edition=prelim - Federal lawHomeowners Protection Act — automatic termination
12 U.S.C. § 4902(b)
Exact part: (b)
What it says: PMI terminates automatically on the termination date if the borrower is current.
Read the official texthttps://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4902&num=0&edition=prelim - Federal lawHomeowners Protection Act — 80% and 78% dates
12 U.S.C. § 4901(2), (18)
Exact part: (2), (18)
What it says: The cancellation date is tied to 80 percent, and the termination date to 78 percent, of the property's original value.
Read the official texthttps://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4901&num=0&edition=prelim
Court cases
- Homeowner wonSame topicRenfroe v. Nationstar Mortgage, LLC
Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241 (11th Cir. 2016)
a servicer that answers a borrower's written request without a reasonable investigation may be liable under RESPA when the borrower alleges resulting damages
- Homeowner wonSame topicJesinoski v. Countrywide Home Loans, Inc.
Jesinoski v. Countrywide Home Loans, Inc., 574 U.S. 259 (2015)
a borrower exercises the Truth in Lending right to rescind by notifying the lender in writing within three years, without needing to sue within that period
- Homeowner wonSame topicMarais v. Chase Home Finance LLC
Marais v. Chase Home Fin. LLC, 736 F.3d 711 (6th Cir. 2013)
a borrower who alleges actual damages, such as added interest, caused by a servicer's deficient response to a qualified written request states a RESPA claim
- Homeowner lostSame topicLage v. Ocwen Loan Servicing LLC
Lage v. Ocwen Loan Servicing LLC, 839 F.3d 1003 (11th Cir. 2016)
a servicer's duty to evaluate a loss-mitigation application depends on its being submitted more than 37 days before the sale date scheduled at that time
- Homeowner lostSame topicGresham v. Wells Fargo Bank, N.A.
Gresham v. Wells Fargo Bank, N.A., 642 F. App'x 355 (5th Cir. 2016) (per curiam) (unpublished)
the federal dual-tracking bar applies only when the servicer receives a complete loss-mitigation application more than 37 days before the foreclosure sale
- Homeowner lostSame topicWhittier v. Ocwen Loan Servicing, L.L.C.
Whittier v. Ocwen Loan Servicing, L.L.C., 594 F. App'x 833 (5th Cir. 2014) (per curiam) (unpublished)
a RESPA claim against a servicer fails without evidence of actual damages caused by the violation
Related rights
Fair handling of your escrow account
12 C.F.R. § 1024.17(c)(1)
If your servicer collects money for taxes and insurance (escrow), it must pay those bills on time as long as you are not more than 30 days behind. It must review the account every year and send you a statement. It cannot keep more than a small cushion (one-sixth of a year's payments), and it must refund a surplus of $50 or more within 30 days of the review. When you pay off the loan, it must return what is left within 20 business days.
Read this rightNo discrimination in housing or home loans (Fair Housing Act)
42 U.S.C. § 3604(a)–(b)
It is illegal to discriminate in selling, renting, or financing a home because of race, color, religion, sex, disability, familial status (having children), or national origin. This covers mortgage lenders and servicers too — for example, in who gets offered a loan modification and on what terms. You can file a complaint with HUD within 1 year or go to court within 2 years.
Read this rightDispute errors on your credit report
15 U.S.C. § 1681i(a)(1)(A)
If your credit report has something wrong or incomplete — like a payment reported late that you made on time — you can dispute it with the credit bureau for free. The bureau must investigate, usually within 30 days, and fix or delete information it cannot verify.
Read this rightMake the company that reported the error investigate it
15 U.S.C. § 1681s-2(b)(1)
The company that reported the information — such as your servicer — must investigate when a credit bureau passes along your dispute, and fix what is wrong with every bureau. In many cases you can also dispute directly with that company, which must then investigate and report back to you.
Read this rightNotice when your loan moves to a new servicer
12 U.S.C. § 2605(b)–(d)
When the company that collects your payments changes, both the old and new servicer must tell you in writing. The old one must usually tell you at least 15 days before the switch; the new one within 15 days after. For 60 days after the switch, a payment you send on time to the old servicer cannot be treated as late.
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50 U.S.C. § 3937(a)(1)
If you (or you and your spouse together) owed a debt before you entered military service, the interest rate is capped at 6% per year while you serve. For a mortgage, the cap lasts during service and for 1 year after. Interest above 6% is forgiven, not just delayed. You must send the creditor written notice and a copy of your orders.
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