Federal Mortgage LawsQuestion 48 of 400
Under the Homeowners Protection Act, when private mortgage insurance is NOT canceled earlier, PMI must terminate at the latest by:
a.The date the loan reaches 80% LTV
b.The first day of the month after the midpoint of the loan's amortization period, if the borrower is current
c.The final payment of the loan
d.The tenth anniversary of the loan
Explanation
The HPA provides a final termination point: if PMI has not otherwise ended, it must be canceled at the midpoint of the amortization schedule (for example, year 15 of a 30-year loan), provided the borrower is current. Eighty percent LTV is the borrower-request threshold, and the final payment or a tenth anniversary are not the statutory endpoints. This ensures PMI does not continue indefinitely.
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