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Can PMI premium change if a loan is sold, or during the term of a loan?

My mortgage is a 5-year ARM with a 30-year term.  When we refinanced into the current mortgage, we were at 97% LTV (6 years ago) and have been paying PMI.  We are now at about 115% LTV since the bottom dropped out of the real estate market.

The mortgage was sold to another lender 2 months ago, and our PMI premium tripled, from the old rate of $153/month to $460/month (discovered only today when the escrow analysis came back saying our payment is going up $300/month).  We have not refinanced (and understandably would not qualify for a refi), and the new lender is going to investigate the premium to see if they made an error.  So I am prepared when they come back with their findings, what is the typical rate or range of rates for PMI?  Would there be any reason it would adjust mid-term without any other change in the loan than it being sold to another lender?
  • August 16 2012 - Plainfield
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Answers (1)

First step is to ask new lender what triggered them to increase the MI. They must have reviewed something in the file re MI that they thought applied. Fortunately, you should have any documentation that they have so you can do your own review, too. I am not aware of MI changing but your 5 yr ARM may not be a typically loan product (fannie mae or FHA).. If they can not produce copies of documents you signed that permit an increase of MI, you may want to seek legal assistance sooner than later.
  • August 17 2012
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