Just wondering how people are handling PMI cancellation requests where servicer rules allow for requests based on "current" value but the person has not met the HPA requirements based on "original" value. I have attached a CFPB bulletin.

CFPB guidance, in my interpretation, states that HPA trumps the servicer rules (page 5). We are not sure what to do when the current value has gone up (just purely based on market not improvements made) but they have not meet the 80 threshold based on original value.

Can the bank have a policy that allows for new appraisals after x amount of time that would allow people to demonstrate a higher value and cancel PMI?

What is happening is that people are saying my value has gone up I want to get a new appraisal to prove it and remove my PMI. This method would be using the “current value” not the “original value”. Freddie allows this but HPA does not appear to.

HPA establishes when you must cancel. If you want to have different requirements that are more beneficial to the customer, then that is totally up to you.

Freddie allows this

Freddie does allow this but they also have seasoning requirements that must be met. Refer to section 8203.2 of the servicing guide.