Homeowners Protection Act Flashcards
First National Bank’s mortgage department generally requires the purchase of PMI when the borrower is making less than a 20% down payment. Which of the following disclosures is NOT required in connection with PMI?
A. loan estimate
B. an initial PMI disclosure
C. An annual disclosure of the borrower’s PMI rights
D. A notice when the mortgage reaches its halfway point
A. loan estimate
John Downey has a mortgage at First National that is covered by the Homeowners Protection Act of 1998. His loan has a fixed rate. On October 1, 2015, his loan will be half way through its amortization schedule. If the loan still has PMI on it at this point, and his payments are current, what is First National’s responsibility?
A. The bank has no responsibility to do anything.
B. The bank must terminate the PMI and notify the borrower.
C. The bank must notify the borrower and give him a chance to request termination of the PMI.
D. The bank must provide a new annual disclosure statement within 30 days.
B. The bank must terminate the PMI and notify the borrower.
Marie Fosse has a mortgage with a lender required PMI. Her loan is covered by the Homeowners Protection Act of 1998. On March 15,2004, the principal on her loan was at 78% of the value of her home. She was 30 days past due on her loan on March 15. On July 15, 2004, her loan will be at the halfway point of its amortization schedule. On May 15 she catches up with her payments and is current on her loan at that time. Which of the following statements is true?
A. The lender should have terminated the PMI on March 15
B. The lender should terminate the PMI by May 15
C. The lender should terminate the PMI by June 1
D. The lender should terminate the PMI by July 15
C. The lender should terminate the PMI by June 1
