Mortgage
Insurance

S 318, the "Homeowners Protection Act of 1998" has been signed by President Clinton.  This will allow homeowners to cancel their private mortgage insurance when 20% equity (80 LTV) is achieved.  It also provides for automatic cancellation at 22% equity (78 LTV).

Here are some of the general conditions:

  • Homeowners must be current on their payments
  • Cannot have been assessed a late charge in the previous 12 months
  • Cannot have any subordinate liens against the property
  • May need a new appraisal 
  • Requests should be made in writing


Mortgage insurance would terminate at mid-life for "high risk" mortgages that do not exceed Fannie Mae and Freddie Mac conforming loan limits ($300,700 as of 12/15/01), and for those high risk mortgages above the conforming loan limits, cancellation would terminate at 23% equity (77LTV).  Fannie Mae and Freddie Mac have been directed to establish industry guidelines for defining a "risky" borrower.

The above information, though believed accurate, is not guaranteed call or email for up to date guidelines ... 

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