Removing PMI

[megstoo]

We did our mortgage through BoA back in June of 2010 and just this month it was sold off to Nationstar.  I was told everything was remaining the same.  When I called them today to see about removing the PMI I was told that we can't until the LTV amount is between 60-70% - this is also what their written correspondence to me is.  This is different than what our original mtg states.  The original to my understanding was 78% or 5 years (whatever comes later).  This is always what BoA told us.  I checked our loan docs and it does state 78%.  I've tried questioning this with Nationstar and they're not willing to do anything about since we're clearly not at the loan to value.  

Has anyone had success with removing PMI when it came down the length of time you've been paying it?  Who else can I contact? I'm already pissed with the service we've gotten from Nationstar and they've had our loan less than 1 month.  

[badgergrl]

Are you at 78% LTV?

[thatgirl2478]

PMI is super irritating to remove. I've never personally seen it written that it's 78% or 5 yrs, but it could be.

So my experience is that my PMI would automatically be removed when my ORIGINAL loan amortized to 78% LTV (ie, about 10 years since we didn't have a downpayment). So even though we paid the loan down to 78% LTV in 8 years, unless we wanted to refi, we were stuck paying PMI for the additional 2 years. At that time I knew it would never appraise for anything near what we paid for it, let alone enough to get to 80% LTV.

The mortgage bankers really stress that you can get rid of PMI by paying more on your mortgage, but that's not necessarily true IME.

[hbomdiggity]

If you're not at 78% I'd sit back and wait for it to get sold again, hopefully to a reasonable company (hah!).

The 78% rule is a law, so assuming the law applies to your mortgage I don't see how they can get around that.

[ellipsis]

The Homeowners Protection Act of 1998 states that you can request it to be removed at 80% (if you fulfill the lender's requirements like no late payments, etc) or it will automatically be removed at 78%.

More info here: portal.hud.gov/hudportal/HUD?src=/program_offices/housing/rmra/res/respapmi

[winemaker06]

If it's 78% or 5 years, this is probably an FHA loan? Because for those, unfortunately, the 78% LTV is calculated on the original amortization table. If you pay any extra toward principle it does not help. So that could be how they're calculating the lower percentage....? Not that that makes sense either though.

ETA: what thatgirl2478 said. It's specific to FHA as far as I know.

[madisen]

BofA has a group that works with borrowers whose loans were service released to NationStar.

If you pm me I'll give you more information. NationStar's response doesn't sound right to me based on what you wrote here.

[megstoo]

Thanks - yes it is an FHA loan and we did the standard 3.5% down. We haven't paid extra towards the mortgage but from what Nationstar told me I can request to have it removed but they don't need to honor that request and I'd need a new appraisal. If the new appraisal doesn't come back high enough than the request is denied. I know mortgages get sold all the time but this is frustrating since they're not really honoring the original terms of our mtg.

[delawarejen]

Your OP says it's 78% or 5 years whichever comes later. That means you have to meet both requirements. If you're not at 78% yet, they don't have to remove it. If you get to 78% then push the issue. In the meantime, unless you're certain that the house would appraise for enough to meet 80% or you can bring more cash to the table, no one's going to let you waive PMI, not even with a refinance to another company.

[madisen]

There is so much misinformation about mortgages. It's really too bad that things have gotten so confusing.

FHA loans have MIP (mortgage insurance premium) while Conventional loans have PMI (private mortgage insurance).

MIP is collected by HUD per the terms of the note and Servicers have no say in how or when it's removed.

Per the timeframe OP's loan is originated, HUD states exactly what OP posted, the later of 60 months of payments or when the unpaid principal balance reaches 78%. On these loans you cannot pay for an appraisal to drop your MIP. The MIP gets dropped automatically when the later of these two things happen. Value is based on the lower of - appraisal at time of loan origination or purchase price at time of loan origination. The only way to get rid of MIP without refi'ing sooner than the regular amortization schedule down to 78% is to pay more to principal and get it to 78% that way, assuming you've also covered the 60 months of payments requirement.

[katb]

May 20, 2015 15:36:51 GMT -5 megstoo said:

We did our mortgage through BoA back in June of 2010 and just this month it was sold off to Nationstar.  I was told everything was remaining the same.  When I called them today to see about removing the PMI I was told that we can't until the LTV amount is between 60-70% - this is also what their written correspondence to me is.  This is different than what our original mtg states.  The original to my understanding was 78% or 5 years (whatever comes later).  This is always what BoA told us.  I checked our loan docs and it does state 78%.  I've tried questioning this with Nationstar and they're not willing to do anything about since we're clearly not at the loan to value.  

Has anyone had success with removing PMI when it came down the length of time you've been paying it?  Who else can I contact? I'm already pissed with the service we've gotten from Nationstar and they've had our loan less than 1 month.  

Our BOA loan was just sold as well.  I will say this past Fall, we got a letter from BOA and FHA that they were removing PMI.  I had not requested it, I was just sent a letter.  My bank documents also state 78% of loan value (Not home value) or 5 years.  October was 5 years.  I tried about 2 years ago to get it off, and that is when BOA told me loan value, not the value of my home.

Side note:  Have you paid a payment to Nationstar yet?  Our payment went up @$6 and I haven't explored why.  I know it's only $6, but I still want to know why.

[aurora]

May 21, 2015 9:14:43 GMT -5 megstoo said:

Thanks - yes it is an FHA loan and we did the standard 3.5% down. We haven't paid extra towards the mortgage but from what Nationstar told me I can request to have it removed but they don't need to honor that request and I'd need a new appraisal. If the new appraisal doesn't come back high enough than the request is denied. I know mortgages get sold all the time but this is frustrating since they're not really honoring the original terms of our mtg.

I'm confused. If you put down 3.5% and are paying the minimum, I don't think you have reached 78% yet. So, by the original terms your lender doesn't have to drop PMI. What am I missing?

[megstoo]

May 21, 2015 11:51:34 GMT -5 katb said:

May 20, 2015 15:36:51 GMT -5 megstoo said:

We did our mortgage through BoA back in June of 2010 and just this month it was sold off to Nationstar.  I was told everything was remaining the same.  When I called them today to see about removing the PMI I was told that we can't until the LTV amount is between 60-70% - this is also what their written correspondence to me is.  This is different than what our original mtg states.  The original to my understanding was 78% or 5 years (whatever comes later).  This is always what BoA told us.  I checked our loan docs and it does state 78%.  I've tried questioning this with Nationstar and they're not willing to do anything about since we're clearly not at the loan to value.  

Has anyone had success with removing PMI when it came down the length of time you've been paying it?  Who else can I contact? I'm already pissed with the service we've gotten from Nationstar and they've had our loan less than 1 month.  

Our BOA loan was just sold as well.  I will say this past Fall, we got a letter from BOA and FHA that they were removing PMI.  I had not requested it, I was just sent a letter.  My bank documents also state 78% of loan value (Not home value) or 5 years.  October was 5 years.  I tried about 2 years ago to get it off, and that is when BOA told me loan value, not the value of my home.

Side note:  Have you paid a payment to Nationstar yet?  Our payment went up @$6 and I haven't explored why.  I know it's only $6, but I still want to know why.

We did make a payment to Nationstar.  They also were wanting to charge a $6 fee.  When I asked about it they said it was a processing fee.  Upon talking with a supervisor that $6 fee is charged if you go to their website to make a payment.  If you use your banks bill pay there is no fee.  

[samanthamkm]

We recently refinanced to get rid of Nationstar. It took us about 5 weeks to get our money from them.

[winemaker06]

May 21, 2015 10:00:36 GMT -5 madisen said:

The only way to get rid of MIP without refi'ing sooner than the regular amortization schedule down to 78% is to pay more to principal and get it to 78% that way, assuming you've also covered the 60 months of payments requirement.

That's interesting. Our research and what we were told still showed that we had to reach 78% LTV using the Original amortization schedule. So paying toward principle didn't help in that way.

[polarbearfans]

May 21, 2015 9:14:43 GMT -5 megstoo said:

Thanks - yes it is an FHA loan and we did the standard 3.5% down. We haven't paid extra towards the mortgage but from what Nationstar told me I can request to have it removed but they don't need to honor that request and I'd need a new appraisal. If the new appraisal doesn't come back high enough than the request is denied. I know mortgages get sold all the time but this is frustrating since they're not really honoring the original terms of our mtg.

Does your original document say that the terms remain if the loan is sold? Ours has specific language that no terms can change if the loan is sold. It was a concern of ours, but the language was build in that the original contract remains when the loan is sold and cannot be changed.

[lifeisinteresting]

I thought one of the rules about FHA loans with that you can never remove PMI. I could be wrong though the way we removed it was by paying for an appraisal, and refinancing which did show that we had more than 20% in our home since our Home price increased/ appraised higher. If you feel your home is risen and you may have paid 20% toward that then just Pay for an appraisal

[madisen]

May 21, 2015 19:57:40 GMT -5 lifeisinteresting said:

I thought one of the rules about FHA loans with that you can never remove PMI. I could be wrong though the way we removed it was by paying for an appraisal, and refinancing which did show that we had more than 20% in our home since our Home price increased/ appraised higher. If you feel your home is risen and you may have paid 20% toward that then just Pay for an appraisal

This is irresponsible advice as FHA loans do not allow for a new/higher appraisal to be used in dropping MIP. You dropped MIP because you refi's not merely because you got a new appraisal.

[madisen]

May 21, 2015 19:11:28 GMT -5 winemaker06 said:

May 21, 2015 10:00:36 GMT -5 madisen said:

The only way to get rid of MIP without refi'ing sooner than the regular amortization schedule down to 78% is to pay more to principal and get it to 78% that way, assuming you've also covered the 60 months of payments requirement.

That's interesting. Our research and what we were told still showed that we had to reach 78% LTV using the Original amortization schedule. So paying toward principle didn't help in that way.

This is straight from HUD

portalapps.hud.gov/FHAFAQ/controllerServlet?method=showPopup&faqId=1-6KT-1670

I can't seem to C&P but read the Notes section that discusses prepayment of principal. There may have been other reasons you weren't allowed to drop MIP, but prepayment is allowed to be counted in the timeframe OP originated her loan.