Lender Trying To Get PMI After 2.5 Years!
In June of 2002 I purchase a condo as my Primary with a 1yr ARM FHA. During all my paperwork it doesn't say anything about charging a monthly PMI (It probably should have since I only had 3% down) It should have, but it didn't. I guess the lender finally caught the mistake and now is trying to collect $950. My question is can they do this when the loan is that old? I can understand them starting to charge me effective today, but not getting stuff in arrears. Advice??
Greetings nic3456,
Hopefully, someone with more experience will answer or come up with some other ideas. But my first thought would be to pull some comps on your property and then talk to your lender.
Overall, the Lexington area has been appreciating at about 6%-8% per year. I’m not sure where your home is, but if it has appreciated at the same rate you could show the lender a current LTV of around 85% -- which is the PMI cutoff for a lot of them.
If you can demonstrate the current value and point out that you’ve made timely payments for two and half years, they may waive it. Or, at least waive any future PMI. But depending on their contract, they may still be entitled to the past amount.
If they want to continue to charge you PMI, you might consider looking into a REFI. You should be able to get a better rate, and lower your payments. You have to consider any pre-payment, points and loan costs, but it might still be better in the long run.
Good luck.
FHA insured loans do not have PMI. They have MIP instead. Usually, the first year premium (1.5% of your loan amount) is collected at settlement and the annual renewal premium (0.5% of the unpaid loan balance) is paid from collected escrows.
The FHA rules for MIP do not follow the other lender's guidelines for PMI. At this late date, I wonder if the lender's oversight isn't the lender's liability. Talk to your attorney about contesting the charge.
Thanks for the input! I did a little research and had a compliance officer at the bank take a look at my paperwork. She said they did not properly disclose the charge and she forwarded it to the insurance dept who reversed the current charges as well as all future charges!!
nic3456 Can you tell us the name of the lender? Local bank ?
Thats what it sounds like, now you go in there and there are never the same tellers from month to month. By the way it got bought out by big bank corp.
It was Chase who bought out Bank One last year....