CFPB Issues Private Mortgage Insurance Cancellation & Termination Guidance
By Anna DeSimone
August 4, 2015 the Consumer Financial Protection Bureau (CFPB) issued a bulletin providing guidance to mortgage servicers regarding the cancellation and termination of private mortgage insurance. The bulletin explains certain requirements of the Homeowners Protection Act and is intended to help servicers comply with the law.
The CFPB has identified substantial industry confusion over implementation of the private mortgage insurance cancellation and termination requirements in the Homeowners Protection Act. Examinations by the Bureau 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.
The bulletin summarizes existing requirements under the law, and does not create any new responsibilities or requirements. Topics covered in the bulletin are outlined below:
A. HPA Requirements
- Passage of the HPA
- Borrower-Requested Cancellation
- Automatic Termination
- Final Termination
- PMI Refunds
- Annual Disclosures
B. Investor Guidelines
- Loan-to-Value Requirements
- Seasoning
C. Regulatory Requirements
About the Author
Anna DeSimone is President and Founder of Bankers Advisory and Principal of CliftonLarsonAllen LLP. She can be reached at Anna@bankersadvisory.com
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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