Questions on mortgage loan

[Anonymous]

I got a mortgage loan through my credit union who sold the loan in the first 10 days before my first payment to Wells Fargo. 

I am aware of how PMI works in general 80% LTV

I've dumped about 40K into the home in the last year and know the appraisal should give me a good LTV and I'd be fine.

I called WF and asked about process they use to cancel PMI ... they said that I have to have the loan for 5 years before I can even cancel PMI and that I cannot use my appraiser I have to use theirs.

I have a serious problem with this theory considering that they are the mortgage company. So I asked if the appraiser is a third party company or hired directly at WF.

They said they are working for WF not a third party appraiser.

I asked where in my paperwork does this comply, they said my loan note.

I checked my loan note and I do not see any of these things except that it says if it's my primary residence I can cancel earlier according to the 1999 ACT.

What can I do to fight this BS and who's correct in this matter ?????

[JM-AM]

I believe they are correct that nowadays on certain loans FHA as example that you must pay the PMI for at least 5 years before you can try and have it removed. Another thing to keep in mind is I believe it isn't based on a new appraisal, it is based on the lower of what you paid for home and or original appraisal. There are a few instances I have seen which allowed a new appraisal but not many. My personal opinion on all this is they have you stuck paying it one way or another. Its all about making a dollar. PMI is suppose to be a rate based on value of home, how much you put down, and how much you pay for the home. But if you were using different lenders with the same numbers good chances you will get a different figure for your PMI. It may not be but a few dollars but those few dollars add up over the years. Hopefully one of the mortghage guru's will explain this to most who are in the same boat as you. Good luck and hope things work out in your favor!

[aot2009]

I know that another mortgage company of a friends who said if they ordered a new appraisal and it is higher then original appraisal then they could cancel PMI.

Also wouldn't my FHA paperwork state that I need to pay for a full 5 years, it says since I reside in the home I can cancel it earlier?

Please explain where this is in writing?

[203bravo]

Every HUD loan is subject to the upfront MIP premium. The upfront mortgage insurance premium rate for purchase, refi, and cash out is 1.75% of the loan amount. Streamline refinance loans are subject to 1.50% upfront MIP.

All programs but the 15 year loan are subject to .25% to .55% annual premium paid monthly for a mandatory minimum of 5 years.

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@aot2009 wrote:

I know that another mortgage company of a friends who said if they ordered a new appraisal and it is higher then original appraisal then they could cancel PMI.

Also wouldn't my FHA paperwork state that I need to pay for a full 5 years, it says since I reside in the home I can cancel it earlier?

Please explain where this is in writing?

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After 5 years, if the LTV is less than 78%, the monthly premiums will no longer apply. 15 year loans are not subject to monthly MIP premiums if the loan-to-value ratio is less than 90%. Otherwise, MIP payments are required until the LTV is less than 78%.

[ShanetheMortgageMan]

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@aot2009 wrote:

I know that another mortgage company of a friends who said if they ordered a new appraisal and it is higher then original appraisal then they could cancel PMI.

Also wouldn't my FHA paperwork state that I need to pay for a full 5 years, it says since I reside in the home I can cancel it earlier?

Please explain where this is in writing?

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Are you the same person as the original poster?

http://www.fhaoutreach.gov/FHAHandbook/prod/infomap.asp?address=4155-2.7.3

d. Determining When a Borrower Has Reached the LTV Ratio for Annual MIP Cancellation

FHA determines when a borrower has reached the 78% LTV ratio based on the lesser of the

• sales price, or
• appraised value at origination (new appraised values will not be considered).

Example: If the lesser of the sales price or appraised value at origination is $100,000, when the loan amount reaches $78,000 FHA no longer collects an annual MIP on the loan.

. Automatic Cancellation of the Annual MIP

For loans closed on or after January 1, 2001, FHA's annual MIP is automatically cancelled under the conditions outlined in the table below.

Note: This MIP cancellation provision only applies to loans with a UFMIP.

For mortgages with ... The annual MIP is ...

terms more than 15 years	cancelled when the LTV ratio reaches 78%, provided the borrower has paid the annual MIP for at least five years. References: For information on how FHA determines when a borrower has reached the 78% LTV ratio, see HUD 4155.2 7.3.d. For more information on UFMIP and annual MIP for mortgages with terms more than 15 years, see HUD 4155.2 7.3.e.
terms 15 years and less, and LTV ratios 90% and greater	cancelled when the LTV ratio reaches 78%, regardless of the length of time the borrower has paid the annual MIP. Reference: For more information on UFMIP and annual MIP for mortgages with terms less than 15 years, see HUD 4155.2 7.3.f.
terms 15 years and less, and LTV ratios of 89.99% and less	not charged.

[aot2009]

Yes thanks for the information