Federal Mortgage LawsQuestion 11 of 400
A borrower with a current loan wants to cancel PMI early. Under the Homeowners Protection Act, a borrower generally may REQUEST cancellation of PMI once the loan balance reaches:
a.80% of the original property value
b.78% of the original property value
c.90% of the original property value
d.50% of the original property value
Explanation
Under the HPA, a borrower may request PMI cancellation when the principal balance reaches 80% of the original value, subject to being current and meeting other conditions such as a good payment history. Automatic termination occurs at 78%. Ninety and fifty percent are not the request thresholds.
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