CFPB Issues Bulletin Regarding the Cancelability of MI
In case you missed it, this week the CFPB issued guidance to mortgage loan servicers confirming the requirements on the cancelability of private mortgage insurance (MI) when the borrower pays down the loan to specified levels. This is one of the advantages of private MI over loans insured by government programs like FHA that must be paid for the entire life of the loan, cannot be cancelled, and thus add significant additional costs to the borrower. Loans with private MI offer borrowers an option that is not only highly competitive in terms of pricing, but also cancelable, thus providing substantial savings to borrowers.
For more information on the differences between PMI and FHA MI visit – http://www.usmi.org/wp-content/uploads/2015/11/FINAL-FHA-Factsheet1.pdf