ajs@hpfcla.UUCP (09/18/85)
> ...FHA and VA homeowners may be paying that 1/2% Mortgage Insurance > Premium unnecessarily. > > ...But this insurance doesn't have to extend for the entire life of the > loan... You can write the lender and ask them to cancel the insurance, > thereby eliminating the MIP from your monthly note. Like hell! I have a vanilla FHA loan issued some time back by a very nice company. When I wrote them about it, they essentially said "Sorry, we have no incentive to drop the insurance". Seems that they have total control over it (do they?) and no reason to drop it. What did I do wrong? How can I *really* get it dropped? Thanks, Alan Silverstein, hpfcla!ajs PS: If this shows up as an orphaned response, (1) apologies and (2) please let me know about it, thanks.
dave@cylixd.UUCP (Dave Kirby) (09/18/85)
The current discussion on mortgage insurance reminds me of an article in the January 30, 1985 edition of the Wall Street Journal, which said that FHA and VA homeowners may be paying that 1/2% Mortgage Insurance Premium unnecessarily. Lenders require this insurance on loans with less than 10% down payment. But this insurance doesn't have to extend for the entire life of the loan. You can cancel it if your mortgage is less than 80% of your house's purchase price or the current appraised price. You can write the lender and ask them to cancel the insurance, thereby eliminating the MIP from your monthly note. According to the Federal Home Loan Bank Board, some lenders have cancelled their mortgage insurance policies and not notified the homeowner. They pocket the MIP themselves, of course. This is illegal, and carries with it criminal penalties for fraud, conversion, and whatever else you want to charge them with. So check out your lender. You may be getting ripped off of 1/2% "interest." ----------------------------------------------------------------- Dave Kirby ( ...!ihnp4!akgub!cylixd!dave) (The views expressed herein do not necessarily reflect those of RCA Cylix. They may not even reflect my own.)
dave@cylixd.UUCP (Dave Kirby) (10/02/85)
In article <42000013@hpfcla.UUCP> ajs@hpfcla.UUCP writes: >>... You can write the lender and ask them to cancel the insurance, >> thereby eliminating the MIP from your monthly note. > >Like hell! I have a vanilla FHA loan issued some time back by a very >nice company. When I wrote them about it, they essentially said "Sorry, >we have no incentive to drop the insurance". Seems that they have total >control over it (do they?) and no reason to drop it. > >What did I do wrong? How can I *really* get it dropped? --------------------------------------------------------------------- I went back to the article, and unfortunately it is carefully worded to say, essentially, that you may REQUEST that your mortgage insurance be dropped, but the article carefully omits any idea that the lender MUST drop it. You might call FHA to see if they can do anything about it. If you have good credit, and have always paid your bills on time, and all that, AND if you can show that your mortgage balance is less than 80% of the market value of your house, then it sounds to me like your lender may be charging you and pocketing the premium themselves. This, according to my article, is more widespread than lenders like to admit. If you're good at getting nasty, you might call the lender, discuss your good credit rating, and then demand to know why they insist on carrying the unnecessary insurance. If they stand fast, demand that they tell you who the insurance is with, and check them out. If you find any- thing rotten, call the FHA office. Lenders hate to deal with FHA because even if they are innocent they still waste a lot of time and money filling out FHA forms. In fact, you can sometimes get action just by threatening to call FHA. Lenders cringe at the thought of having to hassle with FHA, and they sometimes give in on minor points to avoid the paperwork and expense. So if the lender insists on keeping the mortgage insurance premium in spite of your credit, you might try threatening them with an FHA filing and see if this gets them off their duffs. Good luck. Let me know how it turns out. In a couple of years I will be ready to drop my MIP. ----------------------------------------------------------------- Dave Kirby ( ...!ihnp4!akgub!cylixd!dave) (The views expressed herein are the exclusive property of Dave Kirby. Any person, living or dead, found with the same or similar opinions will be prosecuted to the fullest extent of law.)