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Old loan had LPMI and new loan has no MI at all!?

Iam working on a HARP refinance of a loan with LPMI. The LTV for the new loan will be over 100%. The agent tells me the old loan had LPMI that was paid up front. As a result, the new loan will no longer have MI. Does this make sense? The new loan's LTV will be even higher than of the old loan! How can the new loan not be insured?
  • August 12 2012 - Bayonne
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Answers (4)

You need to find a lender that will be able to get the original MI Cert assigned over to the new loan.  Thought process is that you have already paid the premium for the MI with the first loan.  Please contact me through my profile if you would like further assistance.
  • August 12 2012
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Does this make sense?  
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no, you're speaking with a moron.

With a HARP loan, the MI certificate gets transferred to the new loan; in doing so the MI coverage stays intact.

If it was single premium LPMI then there will be no price adjustment on the loan loan because the MI has already been paid.
  • August 12 2012
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To give your loan originator the benefit of the doubt what they meant to say is that you will not be required to pay MI on your new loan. Fannie Mae, the owner of your current and potential new loan will retain the same insurance coverage they already have, which was paid at inception of current loan.
  • August 12 2012
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so am i getting away with not paying for the MI? Because my understanding was that the cost of the MI on the original loan was hidden in a slightly higher interest rate. so i was essentially paying the bank back by paying slightly more interest, right? if so, then by refinancing to a lower rate that has not been adjusted i am no longer paying for the insurance premium that came out of the banks pocket, no? thanks for helping me make sense of this.
  • August 12 2012
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