PRIVATE MORTGAGE INSURANCE

Zimmerman Reed has been contacted by purchasers of private mortgage insurance to investigate the business practices of mortgage lenders who fail to properly notify borrowers when they are entitled to cancel and cease paying private mortgage insurance ("PMI"). Lenders of conventional mortgage loans almost universally require PMI for mortgage loans when the borrower puts down less than 20% of the loan amount.

However, lenders are often required to notify borrowers, in a manner prescribed by statute, when they have reached 20% equity in their homes and qualify for cancellation of the Private Mortgage Insurance. According to homeowner reports, some lenders are failing to provide this notification. Lenders may lawfully require borrowers to obtain an appraisal to establish they have reached the 20% equity level. However, some lenders improperly require the borrower to use the lender's appraiser or to complete the appraisal within a shorter time period than that allowed by law. In both situations, the borrower pays significantly higher fees based upon the lenders' misconduct.

Please contact our attorneys if you believe the mortgage payments you have made, combined with the appreciation of your home's value since the date of your loan, amount to at least 20% of the value of your loan, and 1) your lender has not clearly informed you in writing of your right to cancel PMI or 2) your lender has forced you to choose one of its appraisers.