I requested in writing to have the PMI removed from a conventional residential mortgage loan. The loan is less than a year old. My LTV is 78.7. Per the closing documents and Freddie Mac guidelines, I made a conforming request for removal of the PMI when the LTV was at or below 80%. The lender declined the request based on the "good payment history" provision.
The guidance relative to what constitutes good payment history from Fannie/Freddie is:
"A borrower has a good payment history if the borrower:
(1) has not made a payment that was 60 days or more past due within the first 12 months of the last 2 years prior to the later of the cancellation date, or the date that the borrower requests cancellation; or
(2) has not made a payment that was 30 days or more past due within the 12 months prior to the later of the cancellation date or the date that the borrower requests cancellation. "
My contention to the lender is the guidance does not say the loan shall have existed for either one or two years and that there be no late payments within the time periods prescribed. It states the borrower needs "to have made no late payments within the past 12 months". The difference in phrasing is really the source of contention. Thus because the loan has been in existence less than a year should not preclude or prevent a removal request from being granted as not having the required good payment history.
Anyone come across this requirement, or had luck with a request for removal at 80%?
There is no minimum waiting period. If the loan is owned by FNMA or FHMLC then the servicer must follow their guidelines to what must be done by you, and what steps your servicer must take to cancel the PMI. I recently helped a client come up with a letter to her Servicer that successfully helped her drop her PMI after just 2 months payment and her making large principal curtailment to get her to 80% of the original purchase price. She initially called them and she was told the same thing, you're being told.
Key is FNMA or FHMLC must be the owner of the loan.