Mortgage co won't remove MIP

19 years ago

We have a 5 year old FHA loan. We've prepaid the pricinpal to the point that the balance is now less than 75% of the original loan.

The mortgage company told me to submit the request for removal in writing, which we did. Today I got a letter back from the mortgage company stating that MIP cannot be removed from FHA loans under any circumstances. Our loan was closed after Jan 1, 2001 so qualifies for the removal at 5 years as long as the original loan value has decreased to 78%- it says it in the loan paperwork, and the same information is on HUDs website.

The loan company wouldn't allow me to talk to anyone in the PMI department at an earlier date, but this morning when I called, the customer service rep transfered me to the PMI department where I left a voicemail. Unfortunately there seems to be only 1 person in the PMI department so *IF* she even calls back, I'm going to have to deal with this same person who apparently doesn't know the first thing about FHA loans.

What do I do to get the MIP removed from the loan? I feel stuck and really POed. We don't really want to refi the loan, and shouldn't have to.

Sort by:Oldest

Comments (11)

davidandkasie
19 years ago
FHA loans are 5 years and less than 80% LTV. NOT just original loan amount. so if your area has seen a property value decrease, then the company may be correct.

but i would fight it tooth and nail. you may have to pay for a new appraisal, but they should cave and drop it. if not, your only choice is to refi.
quasifish
Original Author
19 years ago
Actually, FHA LTV is based on the original loan value- I just called HUD to ask about this since I can't seem to get any action from the mortgage company. He said it is based on the loan or appraisal value (whichever is less) at the time the loan is funded and no future appraisal is needed to remove it.

He looked up the loan and agreed that the MIP can indeed be removed in April. He said if the mortgage company won't do it, then HUD will get involved at that point. I'm very impressed with HUD at the moment, very knowledgeable and helpful.

I'll keep you updated and definitely feel better now knowing that what I thought was fact, really is.
Related Discussions
House Pending...Owner Won't move by due date
Q
Comments (13)
"A foreclosure is not nearly the same as a previous owner not vacating as required under the contract. At that point they are simply tresspassing." I disagree. After a foreclosure, the borrower is supposed to be out of the house, as they no longer own it. If you buy a house and close on it, the old owners no longeer own it. In that way, it's the same. The only way that the woman has any legal standing to the property after closing is if there is a lease in effect. Let's assume that she does not. You cannot just show up on her door and kick her out because she's trespassing. She lives there, whether or not she has legal standing to do so. You must then go through eviction proceedings to get her to move. Most of the time, sending a Notice to Vacate is enough to scare the heck out of someone because they know that they shouldn't be there anyway, however, if they don't leave, you then have to continue with the eviction process laid out by statute. All of the states have different rules. This is why it is imperative that the OP speak with an attorney regarding this mess. The OP cannot assume that they can force this woman out without due process.
...See More
Painter won't finish, what to do next?
Q
Comments (32)
deco, i'm very sorry that my wording felt dismissive and rude to you! that wasn't my intent, and i knew from the start that there was no way for me to answer this post without steping on toes because a few of the things were just wrong....and as i said, that is probably a regional issue!! i didn't mean everything that you had shared was wrong, but given the regional differences, and my knowledge of banking law, there were specific differences in this deal. for the record, there is no law that requires a bank to provide three builders to choose from. prudence, and the deep desire to not appear to be in collusion with a builder tells management to share with their lenders that you should always provide at least three references if asked, but that the better option is to provide none at all although, without endorsing any, you can also provide a list of approved builders, and the approval process so that a clients builder can be approved if appropriate. you were right about releases somewhat, but if you re-read what you just posted the lawyers favorite word is there...the bank MAY be responsible...they also may not be :) but since its your home and land, the ultimate responsibility is therefore yours if you care to maintain your interest in the property. title companies are involved in all re transactions at some point, but most are involved at the start and finish of the loan process, not the middle, unless a banks lending capacity rating requires them to have 3rd party oversite on their loans. i wasn't answering with just a bankers experience, but with regulatory experience because i see some very big signs of possible misconduct on the part of the bank. i hate rouge lenders and rouge banks, and was hoping to steer kim onto another path that needs to be explored by her attorney. kinberly...i think you are going to have to leave town on this deal to find the right attorney :( deco i am again sorry. my arm is in a cast and i fiind it terribly hard to type too much too quickly, and that was a rushed post. but beat me up...kimberly has enough grief to deal with and you're being far too touchy with her after her posts. call me terrible...i am sorry i just didn't get that post written as well as i could have! i guess its best that i leave off attempting to comment if i cant take hours to compose a post first.
...See More
His name is on the mortgage...and I want him out
Q
Comments (47)
Maybe I will change my mind in the future, but for now I will move forward with the "what's mine is mine, what's yours is yours" attitude. There are NO garantees in life. I never want to be legally bound to anyone ever again...by marriage, real estate or otherwise. My current husband was the same way. He never wanted to marry again. Eventually, when the hurt wears off you too may change your mind. These days, to even last 10 years is against the odds. A lot can happen in 10 years, people change, married or not. Hopefully, you won't lose a lot & hopefully you can recover from this financially. Hi, OP here. My apologies. ItÂs my fault the topic diverted. I honestly did not mean for this topic to go the way it has. Waking up this morning and reading the latest input, taking in everyone's views on marriage / non marriage. There is a lot of great feedback. No one knows what happened with your relationship, hopefully not being married will be to your advantage. I am 3 times married myself, 1st time too young, 2nd too blind, 3rd much older & wiser. I've seen a lot in my 40 years, people change whether you have that piece of paper or not. Trying to work through things depends on what the situation is. Should I have tried to work out marriage 1? No. Marriage 2 - staying wasn't an option - verbal abuse turned to physical abuse. Currently 8 years that I'm with my husband. He's a good guy, more so then my other choices. He has his moments, some how we've worked through some really rough times. It wasn't that piece of paper that made me stay, being disabled & having no income has made me stick it out. After almost divorcing a few times we're doing really well. It isn't at all clear to me how the OP would be in a better position if she and the BF had married. If anything, their finances would be even more entangled. I have to agree. Divorce #2 for me was costly. Doing a google of Connecticut divorce law, it may be to the OP's benefit that she was not married... Division of Marital Property - Connecticut is referred to as an "all property equitable distribution state." In Connecticut, the Court has the power to "assign to either the husband or wife all or any part of the estate of the other." Conn. Gen. Stats. Â§ 46b-81. Any property, therefore, regardless of when or how acquired, can be re-distributed by the Court. Conn doesn't recognize common law, so that's a plus. I'm interested to hear what the attorney says. Here is a link that might be useful: Connecticut Divorce
...See More
Picture Thread: Kitchens That Won't Look Silly In 20 Years
Q
Comments (32)
So, in these pictures I'm seeing three possible paths to KTWLS. First, kitchens that are explicitly and authentically ''period''. In 2010 and 2030 alike, a vintage 1920's period kitchen will look like a vintage 1920's period kitchen. It hasn't been ''in style'' for 90 years, it isn't pretending to be in style, and it can no more go out of style than the historical waxwork dioramas in the Museum of Natural History. Second, kitchens that are well-executed eclecticism. It isn't of a specific era, doesn't have a specific look, is a collection of disparate elements which are each appealing and go together harmoniously. Even as one of those elements becomes over-exposed and then shades into silly, it's just one risible piece in a still-graceful whole. Third, and I suspect this will be controversial, kitchens that are very, very avant-garde. Tastes change slowly. Furniture of the ''Le Courbusier'', Mies Van De Rohr, Marcel Breuer sort - ''modernist'' if you will - that was so stylish in the 1950s and 1960s, was actually created in the 1920s and 1930s. It took decades for the Wassily chair to go from ultra-modern to mainstream. A very perceptive student of cutting-edge modern design might be able to shoot ahead of the bird, as they say, and build a kitchen that might actually look less silly in 20 years than it does today. Maybe. I wouldn't be able to do it. Well, I can see a final approach, which I think would work in theory for a very few people. Simply transplant a commercial kitchen, or as close as you can, into the house. I think a restaurant kitchen in 2030 will look much like a restaurant kitchen today, save perhaps for more induction, because they are designed for function, not fashion. You'll have a kitchen that is equally institutional and graceless in 20 years as today. I really like seeing the pictures. I hope they keep coming. I'm getting some ideas.
...See More
joyfulguy
19 years ago
quasifish,

It does make one's day to learn that, in dealing with a substantial business corporation, where there was a certain disagreement - that one's point of view was vindicated (by higher powers, that is).

Good wishes for getting the issue straightened out - without too much hassle (and to you satisfaction, of course).

ole joyful
scryn
19 years ago
Hi! I am having the same exact problem as you.

I found out that the loan company (whatever bank you went through) needs to be contacted by the FHA saying you have reached 5yrs/75% ltv and that they do not need to collect MI anymore.
i was told that this will take 2 or 3 months. When i first called my bank I got some idiot that also stated I would have MI forever however I think they said this because the bank NEEDS to be told WHEN they don't need to collect this anymore and can't just stop collecting it when you reach the terms listed in your mortgage.
Anyways, I didn't realize it was the value of the house when we closed and that we couldn't alter that by submitting a new appraisal so it turns out we didn't hit 75% yet and I will have to wait untill next year maybe.
However we are still determining if we want to refinance because the name brand bank we went through is horrible to deal with and we want to go to a local credit union we prefer.
quasifish
Original Author
19 years ago
Joyful, that's the truth! I dare say I felt a little smug after talking with HUD :) I'm not proud of that, but it is nice to be vindicated.

Scryn, you may be right about the company needing to be told, rather than doing it themselves. HUD's information states that we are suppose to go to the mortgage company with that written request and then the mortgage company is to provide pertinent information to FHA who authorizes removal. It does seem like it might be easier to start on the FHA end of things and work backwards though.

Are you the one who posted recently about having enough equity, but being unable to drop MIP? If so, I thought of you yesterday, as the same HUD section I was looking at states that the homeowner can't use an appraisal as a means to drop MIP, that it has to be done by original loan value. I wish you lots of luck too. Dealing with any of these people is such a pain in the rear. I can't believe the lady from the mortgage company won't even call me back- that's just rude. The least she could do is call me back and tell me to take a long walk off a short pier, LOL.

I'm sending another letter to the mortgage company along with information from the HUD website. That's the last we will do, then come May 1, we will take it to HUD. We'll get it taken care of eventually!

Thank you all again!
scryn
19 years ago
Yup! that was me!
Really, they shouldn't say "loan to value" ratio if they don't really mean that! If my house is worth more now then the value is higher, don't you agree!
anyways, oh well. We will pay it off enough so we can get rid of the MI a year late. Not too bad.
Please post if you finally get the MI removed and how, I would like to know for when I go through it again next year!

-renee
Mo
19 years ago
Federal Trade Commission PMI link
saphire
19 years ago
Send the letter registered return receipt, usually gets more attention
quasifish
Original Author
19 years ago
Mona, that link you posted is very interesting. It pertains to PMI wich apparently differs slightly from MIP. What strikes me as most interesting about it is that law that mortgage companies have to have a phone # you can call about PMI- my mortgage company does not and the only times I've been able to get transferred to the PMI department is when I call up hissing mad, and then the woman won't return the call.

I ended up calling the mortgage company again, complained that I've hit a brick wall with the PMI department and that HUD is now threating to get involved if it isn't resolved by May (that got their attention). I managed to get the name of a supervisor not directly linked to the PMI department who will get the letter and can look over the information, which included literature from HUD regarding it. This is the last effort I will make before just letting HUD do whatever it is they will do.
Mo
19 years ago
In that FTC link I posted, it says "These protections do not apply to government-insured FHA or VA loans or to loans with lender-paid PMI."

I found this link which explains in more detail about PMI vs MIP, and that MIP lasts for the life of the loan.
quasifish
Original Author
19 years ago
Mona, apparently your link was written by my unknowledgeable PMI lady :) That's outdated info. Here is current information directly from HUD- on the off chance that you are interested

Here is a link that might be useful: MIP termination

Mortgage co won't remove MIP

Comments (11)

davidandkasie

quasifish
Original Author

Related Discussions

joyfulguy

scryn

quasifish
Original Author

scryn

Mo

saphire

quasifish
Original Author

Mo

quasifish
Original Author

COMPANY

BUSINESS SERVICES

GET HELP

CONNECT WITH US

Mortgage co won't remove MIP

Comments (11)

davidandkasie

quasifishOriginal Author

Related Discussions

joyfulguy

scryn

quasifishOriginal Author

scryn

Mo

saphire

quasifishOriginal Author

Mo

quasifishOriginal Author

COMPANY

BUSINESS SERVICES

GET HELP

CONNECT WITH US

quasifish
Original Author

quasifish
Original Author

quasifish
Original Author

quasifish
Original Author