01/11/2021: Annual PMI Disclosure Notice for Retained Servicing Loans Included with Year End Statement

Retained servicing customers with conventional loans containing Private Mortgage Insurance (PMI) will receive a copy of the Annual PMI Disclosure nested with the mailing of their year-end statement.


Required by the Homeowners Protection Act (HPA), this notification outlines the process customers should follow if they wish to request cancellation of PMI.


The verbiage contained in the Annual PMI Disclosure is shown below:



Customer Name(s)

Mailing Address

City, State Zip Code



ANNUAL PRIVATE MORTGAGE INSURANCE (PMI) DISCLOSURE


We, Fairway Independent Mortgage Corporation, require you to maintain private mortgage insurance (PMI) in connection with your mortgage loan. PMI protects lenders and others against financial loss if the loan defaults. Federal Law provides that under certain circumstances, you may have the right to cancel Private Mortgage Insurance (PMI). Federal Law also establishes when PMI must be terminated. This disclosure describes those cancellation and termination rights.


Borrower’s Requested Cancellation

At the borrower’s request to the Servicer, PMI must be canceled if certain requirements are met.  

You may request cancellation based on the original value of their property on either:

  1. The date on which the principal balance of the loan, based solely on the initial amortization schedule, is first scheduled to reach 80% of the original value of the property securing the loan.

The date on which the principal balance of the loan, based solely on actual payments made, reaches 80% of the original value of the property securing the loan

Depending on who owns your mortgage loan, you may be eligible to request cancellation based on the current value of your property at any time.  If the mortgage loan qualifies for cancellation based on the current value, then in addition to all other cancellation requirements described in this section, the following requirements must be met:

  1. if the seasoning of the mortgage loan is between two and five years, then the loan-to-value (LTV) ratio must be 75% or less.
  2. if the seasoning of the mortgage loan is greater than five years then the LTV must be 80% or less.
  3. If the mortgage loan is seasoned less than 2 years, the loan to value ratio for your property must be 80% or less and evidence of substantial improvements must be provided.  Substantial improvements are improvements that increase value and are typically renovations that substantially improve marketability and extend the useful life of the property, such as a kitchen renovation, or the addition of square footage. 


In all cases the LTV must be evidenced by a property valuation based on an inspection of both the interior and exterior of the property. Any valuation required must be ordered by the lender and is at the borrower’s expense.


The following requirements must be met in order for PMI to be removed based on the borrower’s request:

  1. You must submit the cancellation request in writing.
  2. You must have a good payment history on your loan. A good payment history there have been no payments 60 days or more past due within the 24 months prior to the cancellation request, and no payments 30 days or more past due within the 12 months prior to the cancellation request.
  3. You must be current on your payments as required by the terms of the mortgage documents at the time the time of the cancellation request.
  4. You must have satisfied the note holder’s request for:
  5. Evidence that the value of the property securing the note has not declined below its original value.  A valuation of the property may be required. Any valuation required must be ordered by the lender and is at the borrower’s expense.
  6. Certification that you do not have a subordinate lien on the equity in the property.

*Depending on who owns your mortgage loan, we may be able to accept your request verbally.  All other requirements would still apply.

You may request cancellation of your PMI by:

The PMI Removal Form can be emailed/mailed to you.

AUTOMATIC TERMINATION

If you are current on your mortgage loan payments, PMI will automatically terminate when the principal balance of your loan is scheduled to reach, based solely on the initial amortization schedule, 78% of the original value of the property. If, at that time, you are not current on your mortgage loan payments, PMI will automatically terminate on the first day of the month following the date on which you become current after the date PMI otherwise would have automatic terminated.


FINAL TERMINATION

If your PMI has not otherwise been cancelled or terminated as described above and your mortgage loan payments are current, final termination of your PMI will occur on the first day of the month immediately following the date that is the midpoint of the amortization period based on the initial amortization schedule. 

Contact us at (877) 297-5350 from 8:30 a.m. to 5:00 p.m. Central Time, Monday through Friday if you have questions in regards to whether or not you have met all the requirements to cancel your PMI.


Sincerely,

Fairway Independent Mortgage Corporation


A copy of this notification will be viewable in the Document Management System (DMS).