Under the Homeowners Protection Act, PMI must be automatically terminated when the loan-to-value ratio reaches:
Correct Answer
B) 78%
The Homeowners Protection Act requires automatic termination of PMI when LTV reaches 78% based on the original property value. Borrowers can request cancellation at 80% LTV. This applies to conventional loans originated after July 1999.
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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.
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
More Financing Questions
Compliance case Cedar Docket frames the issue this way. A Florida buyer borrows $272,000 on a purchase price of $320,000. What is the loan-to-value ratio?
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