HPA – What annual disclosures are required for residential mortgage transactions?

Compliance > Homeowners Protection Act
Q:  What annual disclosures are required for residential mortgage transactions? 
 
A:    For all residential mortgage transactions, including high risk mortgages for which PMI is required, the servicer must pro­vide the borrower with an annual written statement that sets forth the rights of the borrower to PMI cancellation and termi­nation and the address and telephone number that the borrower may use to contact the servicer to determine whether the bor­rower may cancel PMI (12 USC §4903(a)(3)).
 
Disclosures for Existing Residential Mortgages
 
When PMI was required for a residential mortgage consum­mated before July 29, 1999, the servicer must provide to the borrower an annual written statement that:
  • States that PMI may be canceled with the consent of the lender or in accordance with state law; and
  • Provides the servicer’s address and telephone number, so that the borrower may contact the servicer to determine whether the borrower may cancel PMI (12 USC §4903(b)).
 
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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