A servicer receives a borrower's PMI cancellation request on January 10th. The borrower has provided an appraisal dated December 5th of the previous year showing the LTV at 78%. What should the servicer do?
Correct Answer
B) Reject the request because the appraisal is too old
Under the HPA, when a borrower requests PMI cancellation based on property value appreciation, any appraisal or broker price opinion must be no more than 90 days old. An appraisal from December 5th would be more than 90 days old by January 10th, making it unacceptable for cancellation purposes.
Why This Is the Correct Answer
Under the HPA, when a borrower requests PMI cancellation based on property value appreciation, any appraisal or broker price opinion must be no more than 90 days old. An appraisal from December 5th would be more than 90 days old by January 10th, making it unacceptable for cancellation purposes.
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