A borrower's loan reached the automatic termination date for PMI, but the borrower is currently 45 days past due on their mortgage payment. What must the servicer do regarding PMI?
Correct Answer
B) Continue collecting PMI until the borrower becomes current
Under the HPA, automatic PMI termination only occurs when the borrower is current on their mortgage payments. If the borrower is delinquent at the automatic termination date, the servicer must continue collecting PMI premiums until the borrower becomes current on payments.
Why This Is the Correct Answer
Under the HPA, automatic PMI termination only occurs when the borrower is current on their mortgage payments. If the borrower is delinquent at the automatic termination date, the servicer must continue collecting PMI premiums until the borrower becomes current on payments.
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