A borrower whose mortgage balance has reached 80% of original value telephones the servicer to request cancellation of borrower-paid PMI under the Homeowners Protection Act. What form must the cancellation request take, in addition to meeting the other cancellation conditions?
Correct Answer
A) Submit the cancellation request in writing to the servicer
A. The borrower must submit a written cancellation request to the servicer. Reaching the balance threshold does not make a telephone request satisfy the written-request condition. Requested cancellation is distinct from scheduled automatic termination, which does not depend on this request. Scope and exceptions: Writing alone does not establish eligibility. Payment history, current status and applicable property-value and junior-lien conditions remain relevant. Follow the servicer’s valid submission instructions rather than assuming any informal message is sufficient. Source: Requesting cancellation at 80% of original value — https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/
Why This Is the Correct Answer
A. The borrower must submit a written cancellation request to the servicer. Reaching the balance threshold does not make a telephone request satisfy the written-request condition. Requested cancellation is distinct from scheduled automatic termination, which does not depend on this request. Scope and exceptions: Writing alone does not establish eligibility. Payment history, current status and applicable property-value and junior-lien conditions remain relevant. Follow the servicer’s valid submission instructions rather than assuming any informal message is sufficient.
Why the Other Options Are Wrong
Option B: The request must wait until the balance has reached 78% of value
The borrower does not need to wait for the scheduled automatic threshold to request cancellation.
Option C: The request must be accompanied by 2 years of tax returns
Two years of tax returns are not this statutory request requirement.
Option D: The request must come through the mortgage insurer, not the servicer
The servicer, not an insurer-only submission channel, is the identified recipient.
Exam Tip
Balance eligibility and request procedure are separate requirements.
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