HOPA Flashcards
What is HOPA?
Homeowner’s Protection Act
What does HOPA do?
gives consumers the right to have private mortgage insurance (PMI) automatically canceled in certain cases and requires lenders to give consumers notice of required PMI
When must a creditor cancel PMI at the borrowers request?
PMI must be canceled on the cancellation date if the borrower * submits a request in writing
* has a good payment history
* is current on payments
* has satisfied any requirements of the holder of the mortgage as of the date of request for
- evidence that property value has not declined below the original value
- certification that equity is not encumbered by a subordinate lien
When is the PMI cancellation date for fixed-rate mortgages?
* the date on which the initial amortization schedule states the principal balance of the mortgage is first scheduled to reach 80% of the original value of the property (irrespective of the outstanding balance for the mortgage on that date) OR
* the date on which the actual payments reduce the balance of the mortgage to 80% of the original value of the property
When is the PMI cancellation date for ARMs?
at the option of the borrower
* the date on which the amortization schedule currently in effect states the principal balance of the mortgage is first scheduled to reach 80% of the original value of the property (irrespective of the outstanding balance for the mortgage on that date) OR
* the date on which the actual payments reduce the balance of the mortgage to 80% of the original value of the property
What classifies as ‘good payment history’ for cancellation of PMI?
the borrower has not, during the applicable time period preceding either the cancellation date or the date the borrower submits request for cancellation (whichever is later);
* made a payment that was 60 days or longer past due during previous 24 months
* made a payment that was 30 days or longer past due during the previous 12 months
When must a creditor automatically cancel PMI?
PMI must automatically terminate when the principal balance reaches 78% of the original property value based on the amortization schedule in effect so long as the borrower is current
If the borrower is not current when PMI must automatically cancel, how is the time schedule effected?
the lender must terminate PMI on the first day of the first month beginning after the borrower becomes current on the payments required by the terms of the mortgage
If the PMI does not meet the requested or automatic termination requirements when must final termination be complete?
no requirement for PMI may be imposed beyond the first day of the month immediately following the date that is the midpoint of the amortization of the loan if the borrower is current on the payments required by the terms of the mortgage
PMI termination and cancellation provisions do not apply to loans that are ___________ at the time of consummation.
High-Risk Mortgage Loans as determined by the guidelines published by FNMA and FHLMC
PMI disclosures must be provided to the borrower, ______________ and must explain ______________.
* at the time of consummation
* termination and cancellation provisions of PMI on their loan
PMI annual disclosure requirements include:
a written statement annually with the borrower rights and servicer contact info
Notice of PMI cancellation or termination is required within _______.
30 days
If the servicer determines that the mortgage does not meet the requirements for termination or cancellation of PMI, the servicer must:
provide written notice to the borrower of the grounds relied on to make the determination (including the results of any appraisal used to make the determination)
For lender paid PMI, an initial notice is required no later than ______________ and must explain:
* the date on which the loan commitment is made
- the lender paid PMI differs from borrower paid and a generic analysis of differences over 10 year period
- lender paid PMI usually results in a higher interest rate
- lender paid PMI terminates only when the mortgage is refinanced, paid off, or otherwise terminated
- lender paid PMI may be tax deductible
