An investor is insisting we repurchase a loan made in 2008. The MI was cancelled in Dec 2010, but the investor has continued to collect the MI escrow amount for the past 2 1/2 years....Can they do that legally?

When they do an escrow analysis and see they are collecting too much, they should adjust accordingly and refund any overage. Now, increased taxes/insurance (if escrowing for those as well) might have offset it and made it irrelevant, but it sounds like they might still have MI showing on the analysis?

If so, they've got some problems to fix I'd say. Are the borrowers getting refund checks every year and maybe the investor just has bad internal controls to update things? Or are they "paying" a bill they don't owe? Depends on a few other things, but they should have to fix it in one way or another.

MI is still on the escrow analysis. When I questioned it they said they had an appeal with the MI company still pending. They were continuing to collect the premiums and would pay the MI when they won their appeal. After 2 1/2 years no less.

Just why are they putting this loan back and why would you accept it if they have not serviced it appropriately. Sounds like you might have ground to say thanks, but no thanks.

Thanks for the advice...I will be heading to the compliance officer's desk next.

The MI was cancelled in Dec 2010, but the investor has continued to collect the MI escrow amount for the past 2 1/2 years

You may want to review section 4904 of the Homeowners Protection Act. This investor has some serious issues.

Sec. 4904: Notification upon cancellation or termination (01/19/04)

(a)In general

Not later than 30 days after the date of cancellation or termination of a private mortgage insurance requirement in accordance with this chapter, the servicer shall notify the mortgagor in writing -

(1)that the private mortgage insurance has terminated and that the mortgagor no longer has private mortgage insurance; and

(2)that no further premiums, payments, or other fees shall be due or payable by the mortgagor in connection with the private mortgage insurance.