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#2198141 - 11/13/18 11:09 PM PMI - Determining 78% threshold
IGaev Offline
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Joined: Dec 2016
Posts: 46
CA 99-11 (7/01/99) FRB Community Affairs Letter indicates that Regulation Z commentary would be availed regarding the impact of rounding on the 78% threshold related to automatic termination of PMI.

I researched Reg Z in an attempt to locate the exact commentary to no avail and the recent guidance on HPA compliance dated August 2015 (CFPB) does not include specific guidance regarding rounding.

Can anyone point me in the right direction or provide their perspective? For example, if rounding to determine 78%, I believe we should select 77.58% from the below. And if that is correct, that the insurance should be cancelled "on" the corresponding date within the loan's amortization schedule.

I welcome your thoughts and if you can point me to the guidance, it would be greatly appreciated.

77.32%, 77.58%, 77.84%, 78.1%

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#2198146 - 11/14/18 01:52 AM Re: PMI - Determining 78% threshold IGaev
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,949
Galveston, TX
You are referring to a CA that is 20 years old. As far as I aware, there is no rounding. 78% is 78%. You terminate when it drops below 78%.
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#2198425 - 11/16/18 01:56 PM Re: PMI - Determining 78% threshold IGaev
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,964
Bloomington, IN
Can anyone point me in the right direction

The Commentary to 1026.18(s)(3)(i)(C)-2 speaks to disclosing mortgage insurance payments. However , like Randy, I'm not aware of any rounding guidance. If the LTV will be 77.9% in month 100 then the LTV is below 78% and should be terminated in month 100.
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The opinions expressed are mine and they are not to be taken as legal advice.

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