As you all know, the Homeowners Protection act allows banks to require evidence that the value of the property securing the mortgage has not declined below the original value of the property.

I was curious as to what other banks did in this regard.

We require the borrower to pay for a brokers price opinion (BPO).

Any input would be appreciated.

Thanks,
JB

For home mortgages signed on or after July 29, 1999, your PMI must - with certain exceptions - be terminated automatically when you reach 22 percent equity in your home based on the original property value, if your mortgage payments are current. Your PMI also can be canceled, when you request - with certain exceptions - when you reach 20 percent equity in your home based on the original property value, if your mortgage payments are current.


Typically if the homeowners are current and don't have a poor payment history, most banks just go ahead and cancel it. Less cost to the homeowners and less time to the bank (time=money) and better customer service.

Well I guess we are not most banks.

We require an appraisal, by a different appraiser than the original, at the borrower's expense.

In today's real estate market it would be prudent to obtain the appraisal before releasing the PMI.