A borrower with a conventional loan made a 10% down payment. Three years later, they complete a major home renovation that increases the property value by 25%. Can they immediately request PMI cancellation based on the increased property value?
Correct Answer
A) Yes, if an appraisal confirms the increased value
Under the HPA, borrowers can request PMI cancellation based on property value increases from home improvements at any time, provided they can demonstrate the increased value through an acceptable appraisal or broker price opinion. Unlike appreciation-based requests, there is no waiting period for improvement-based value increases.
Why This Is the Correct Answer
Under the HPA, borrowers can request PMI cancellation based on property value increases from home improvements at any time, provided they can demonstrate the increased value through an acceptable appraisal or broker price opinion. Unlike appreciation-based requests, there is no waiting period for improvement-based value increases.
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?
A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
People Also Study
General Mortgage Knowledge
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
A lender discovers that the APR disclosed on the Closing Disclosure is 0.20 percentage points higher than the actual APR. What action is required under TILA?
Next Question
A lender's HMDA data shows that 85% of white applicants are approved compared to 70% of Hispanic applicants. The lender argues this difference is due to credit score variations. What additional analysis would be most appropriate?