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#2188287 - 08/07/18 06:20 PM PMI Release Question on Delinquent Loan
knm1872 Offline
New Poster
Joined: Feb 2018
Posts: 20
Question has arose...
we have a customer who habitually pays after the due date of the 1st.
They reached their termination date of 7/1/2018 but were delinquent. Customer pays within the month but not necessarily by the 1st. Customer has habitually been late. Never by the 1st, sometimes within grace, sometimes later. 1-29 days 80 times, 30-59 days 38 times, 60-89 days 1 time. For 2018, it's been between 1-29 days.
The customer was current as of 7/31/18 but again became delinquent as of 8/1/18.
Our loan serving folks want to release the PMI, customer is at 78% LTV, due to the fact that they actually became current. CCO says no. Property value has declined and may be close to the current loan balance. In his mind the PMI provides extra assurance in case of default.
Do we have obligation to release because they were current at one given day? Current per our loan agreement/system tracking.
Thank you!

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Lending Compliance
#2188291 - 08/07/18 06:41 PM Re: PMI Release Question on Delinquent Loan knm1872
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,226
Galveston, TX
If they have brought this loan current, you have to release:

There is no provision in the automatic-termination section of the act, as there is in the borrower- requested PMI cancellation section, that protects the lender against declines in property value or subordinate liens. The automatic-termination provisions make no reference to good payment history (as prescribed in the borrower-requested provisions) but state only that the borrower must be current on mortgage payments.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2188294 - 08/07/18 06:54 PM Re: PMI Release Question on Delinquent Loan knm1872
knm1872 Offline
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Joined: Feb 2018
Posts: 20
Thank you so much!!

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