A borrower wants to use a current appraisal to demonstrate 80% LTV for PMI cancellation. Under the Homeowners Protection Act, what may the lender require?
Correct Answer
D) The borrower must demonstrate that the property value has not declined below the original purchase price
When using current property value for PMI cancellation, lenders may require evidence that the property value has not declined below the original purchase price, and the borrower typically pays for any required appraisal or valuation.
Why This Is the Correct Answer
When using current property value for PMI cancellation, lenders may require evidence that the property value has not declined below the original purchase price, and the borrower typically pays for any required appraisal or valuation.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
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Which of the following documents must be provided to trigger the start of the 3-day rescission period?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
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Previous Question
A borrower purchased a home for $300,000 with a 10% down payment. The original loan amount was $270,000. At what remaining loan balance would PMI automatically terminate under the Homeowners Protection Act?
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A manufactured home HPML secured by both the home and land has an APR 2.5% above APOR. The loan includes a prepayment penalty for the first 36 months. Which statement is correct?