An Ohio buyer obtains a conventional mortgage with a 90% LTV. The lender requires private mortgage insurance (PMI). Under federal law, the borrower may request cancellation of PMI when the LTV reaches:
Correct Answer
A) 80%
Under the Homeowners Protection Act (HPA), borrowers may request cancellation of PMI when the LTV reaches 80% based on the original property value. PMI is automatically terminated when the LTV reaches 78% of the original value.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A comparison of the major mortgage loan types—conventional, FHA, VA, and USDA—covering their eligibility requirements, down payment amounts, mortgage insurance rules, and best use cases.
Predatory lending refers to unfair, deceptive, or abusive lending practices that impose unjustified terms on borrowers, often targeting vulnerable populations. It includes practices like excessive fees, inflated appraisals, and unnecessary refinancing.
RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
More Oh Financing Closing Questions
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