I have been told that PMI cannot be cancelled (upon borrower request) until the mortgage loan has been at the bank for at least two years, even if it has already fallen below 80% of the property value. Is this time requirement of two years right? I know the borrower must have a "good payment history", but I didn't realize it had to be for two years. Any guidance would be appreciated.

This use to be a requirement of Freddie, not sure about Fannie, that the loan had to be seasoned. The requirements have been relaxed with the implementation of HPA. You will want to review the Freddie Servicer Guide section 61 (I think).

Is there a link to the Freddie Mac Servicing Guide you are referring to? I'm not sure exactly what you are referring to here.

I subscribe to AllRegs and have access to the guide through them. Go to Freddie's Web site to see if they have a link (I haven't been to their site for awhile), or contact your underwriting department. If you sell to Freddie they should have access to the guide.