How often must servicers notify borrowers of their PMI status under the Homeowners Protection Act?

How often must servicers notify borrowers of their PMI status under the Homeowners Protection Act?

• A. Every month
• B. Annually
• C. Every six months
• D. Only at the time of loan origination

Answer: (B)

Under the Homeowners Protection Act, servicers are required to notify borrowers of their Private Mortgage Insurance (PMI) status at least annually. This requirement is in place to ensure that borrowers are aware of their PMI obligations and the potential for its cancellation once certain conditions are met, such as reaching a specific loan-to-value ratio. The annual notification helps borrowers track their mortgage balance and understand when they may no longer need to pay for PMI, which can result in significant savings. Being informed annually allows borrowers to manage their finances effectively and engage with their servicer regarding PMI cancellation when appropriate.

Under the Homeowners Protection Act, servicers are required to notify borrowers of their Private Mortgage Insurance (PMI) status at least annually. This requirement is in place to ensure that borrowers are aware of their PMI obligations and the potential for its cancellation once certain conditions are met, such as reaching a specific loan-to-value ratio. The annual notification helps borrowers track their mortgage balance and understand when they may no longer need to pay for PMI, which can result in significant savings. Being informed annually allows borrowers to manage their finances effectively and engage with their servicer regarding PMI cancellation when appropriate.