Real Estate Home Mortgages/lpmi
QUESTION: My loan closed with no mention of pi lpmi or bmi on may 31 2009. On June 1 Fannie Mae took out lpmi and never informed me. Doesn't that violate the homeowners protection act?
June 1 of what year?
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QUESTION: The next day, June 1 2009
Portfolio lenders used to build the lpmi cost into the offered interest rate, with no other costs to the borrower. Prior to 2010 such an arrangement did not require a disclosure, but the new Good Faith Estimate and Truth in Lending disclosures do require a separate disclosure to the borrower.
As to the Homeowners Protection Act, I have to be careful here. As a layman, I am prohibited by the owners of this website from offering anything that comes close to giving a legal advise. That being said, here is what I think:
Let's say that the cost of the lpmi was an increase in the rate of 0.75%, and let's further assume that the rate offered people who did not require lpmi was 6.00%. For you, then, the rate was 6.75%. If the lender showed 6.75% on the Truth in Lending form, they most probably complied with the disclosure requirement of the time. If, on the other hand, they disclosed 6.00% but then proceeded to charge you 6.75%, they have certainly violated quite a few laws.
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