What is the Homeowner’s Protection Act?

The Homeowner’s Protection Act, also known as the PMI Cancellation Act, is a federal law that was passed in 1999. It is based in Kansas and applies to all mortgage lenders and loan servicers who receive mortgage insurance payments. Its purpose is to protect homeowners from paying private mortgage insurance (PMI) for longer than necessary. The act requires lenders and loan servicers to automatically terminate PMI when certain conditions are met. The PMI must be cancelled on the date the principal balance reaches 78% of the original value of the home, or the date when the borrower reaches a full 22% equity in the home. For adjustable rate mortgages, the requirement must be met within the first 5 years of the mortgage. Additionally, the act requires lenders and loan servicers to notify borrowers when PMI is needed and when it is required to be terminated. Most lenders and loan servicers must provide the annual PMI disclosure statement and ensure that PMI is terminated in a timely manner. The Homeowner’s Protection Act is an important protection for Kansas homeowners and provides transparency for all borrowers. It helps ensure that homeowners are not paying for PMI for longer than necessary and are able to build equity in their homes.

Related FAQs

What is the Home Mortgage Disclosure Act?
What is the Payment Card Industry Data Security Standard?
What is the U.S. Bankruptcy Code?
What is the Community Reinvestment Modernization Act?
What is the Consumer Leasing Act?
What is the Fair Debt Collection Practices Act?
What is the Dodd-Frank Wall Street Reform and Consumer Protection Act?
What are the U.S. banking laws?
What is the Equal Credit Opportunity Act?
What laws protect personal banking information?

What is the Homeowner’s Protection Act?

Related FAQs

Related Blog Posts