HPA – What initial disclosures are required for high risk residential mortgage transactions?

Compliance > Homeowners Protection Act
Q:  What initial disclosures are required for high risk residential mortgage transactions? 
 
A:    When PMI is required for high risk residential mortgage trans­actions, the lender must provide to the borrower a written no­tice stating that PMI will not be required beyond the date that is the midpoint of the loan’s amortization period if, on that date, the borrower is current on the payments as required by the terms of the loan. The lender must provide this notice at consummation. The lender need not provide disclosure of the termination at 77 percent LTV for lender defined high-risk mortgages (12 USC §4903(a)(2)).
 
 
This Q&A was based on information contained in the FDIC’s Compliance Examination Manual for Homeowner’s Protection Act – September 2015, which may be found here:  https://www.fdic.gov/regulations/compliance/manual/5/v-5.1.pdf
 

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