Profile picture for AmelFl

Mortgage Company will not remove MIP Insurance

Can anyone clarify this for me. My LTV is less than 78% and I have owned the Condo for almost 10 years. The mortgage company still will not remove the MIP payment This is what I have received in the mail:

"Private mortgage insurance protects the FHA program in cases of default and    
is a requirement for FHA loans. Because your loan was insurable, FHA made      
the loan with less stringent underwriting requirements and in some cases a     
lower down payment, compared to uninsured loans. Because of these              circumstances, mortgage insurance is required until 06/01/32."

I couldn't find any info about this, would this be correct?

Thanks 
  • June 21 2011 - US
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Answers (5)

Best Answer

No, condos AND rehabilitation loans ARE excluded from the cancellation policy.

  • June 21 2011
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Profile picture for bob_merchant
Your MIP can be canceled if:
1. your mortgage term is more than 15 years and
2. the loan to mortgage ratio goes to 80% and
3. you have paid MIP for a minimum of 5 years

Call HUD and ask them. HUD officers are more helpful than the banks. MIP is a HUD/FHA requirement that is collected by your mortgage company for HUD/FHA.
  • June 29 2011
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Profile picture for AmelFl
Hello Chris,

In other words my loan was some sort of a 'rehabilitation loan' and does not qualify for the removal?

I have found some more info, but don't understand the difference
http://www.professordom.com/ProfessorDomWebsite/GuidelineMatrix/FHA_Mortgage_Insurance_Premium_Chart_Oct_2008.htm

Thanks
  • June 21 2011
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Unfortunately, the answer is yes.  This mortgage insurance premium cancellation provision applies only to loans insured under the Mutual Mortgage Insurance (MMI) fund.  The MMI fund does not include mortgages on condominiums or Section 203(k) rehabilitation loans, among others. 

Link to FHA information

 

  • June 21 2011
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Profile picture for sunnyview
I am no lender, but that doesn't sounds right to me. You might try reposting your question in the "Mortgage" section of Advice here where the helpful Zillow lenders are more likely to see it and reply. 
  • June 21 2011
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