Is anyone aware of a state law addressing how banks are to handle PMI escrow cushion? Are we to apply the cushion to the final payments prior to canceling the insurance (at 78% LTV)or must we refund the cushion after the manditory cancelation of the insurance? I was reading the new staff commentary to Reg Z and the guidance on payment schedules. It mentions that the payment streams must reflect exactly how the PMI cushion is applied per state law. I reviewed Title 24 Article 4.5, but couldn't find anything relating to PMI cushion. I just wanted to make sure I didn't miss anything.

Rick, the DFI does not regulate private mortgage insurance.

This is found in the Analysis and Commentary:

VI.: Private Mortgage Insurance Requirements

Indiana does not expressly regulate issues involving private mortgage insurance.

Thanks Dan! I knew I could count on you!