§ 4902. Termination of private mortgage insurance

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1998

   Pub. L. 105–216 § 3 · 112 Stat. 897

   Enacted · 12 U.S.C. § 4902

   Pub. L. 105–216, § 3, July 29, 1998, 112 Stat. 899

   Source evidence

   Code source credit
   Pub. L. 105–216, § 3, July 29, 1998, 112 Stat. 899

   Enacted provision · exact public law section
   SEC. 3. TERMINATION OF PRIVATE MORTGAGE INSURANCE. (a) Borrower Cancellation.— A requirement for private mortgage insurance in connection with a residential mortgage transaction shall be canceled on the cancellation date, if the mortgagor— (1) submits a request in writing to the servicer that cancellation be initiated; (2) has a good payment history with respect to the residential mortgage; and (3) has satisfied any requirement of the holder of the mortgage (as of the date of a request under paragraph (1)) for— (A) evidence (of a type established in advance and made known to the mortgagor by the servicer promptly upon receipt of a request under paragraph (1)) that the value of the property securing the mortgage has not declined below the original value of the property; and (B) certification that the equity of the mortgagor in the residence securing the mortgage is unencumbered by a subordinate lien. (b) Automatic Termination.— A requirement for private mortgage insurance in connection with a residential mortgage transaction shall terminate with respect to payments for that mortgage insurance made by the mortgager— (1) on the termination date if, on that date, the mortgagor is current on the payments required by the terms of the residential mortgage transaction; or (2) on the date after the termination date on which the mortgagor becomes current on the payments required by the terms of the residential mortgage transaction. (c) Final Termination.— If a requirement for private mortgage insurance is not otherwise canceled or terminated in accordance with subsection (a) or (b), in no case may such a requirement be imposed beyond the first day of the month immediately following the date that is the midpoint of the amortization period of the loan if the mortgagor is current on the payments required by the terms of the mortgage. (d) No Further Payments.— No payments or premiums may be required from the mortgagor in connection with a private mortgage insurance requirement terminated or canceled under this section— (1) in the case of cancellation under subsection (a), more than 30 days after the later of— (A) the date on which a request under subsection (a)(1) is received; or (B) the date on which the mortgagor satisfies any evidence and certification requirements under subsection (a)(3); (2) in the case of termination under subsection (b), more than 30 days after the termination date or the date referred to in subsection (b)(2), as applicable; and (3) in the case of termination under subsection (c), more than 30 days after the final termination date established under that subsection. (e) Return of Unearned Premiums.— (1) Deadline. In general.— Not later than 45 days after the termination or cancellation of a private mortgage insurance requirement under this section, all unearned premiums for private mortgage insurance shall be returned to the mortgagor by the servicer. (2) Deadline. Transfer of funds to servicer.— Not later than 30 days after notification by the servicer of termination or cancellation of private mortgage insurance under this Act with respect to a mortgagor, a mortgage insurer that is in possession of any unearned premiums of that mortgagor shall transfer to the servicer of the subject mortgage an amount equal to the amount of the unearned premiums for repayment in accordance with paragraph (1). (f) Exceptions for High Risk Loans.— (1) In general.— The termination and cancellation provisions in subsections (a) and (b) do not apply to any residential mortgage or mortgage transaction that, at the time at which the residential mortgage transaction is consummated, has high risks associated with the extension of the loan— (A) as determined in accordance with guidelines published by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, in the case of a mortgage loan with an original principal balance that does not exceed the applicable annual conforming loan limit for the secondary market established pursuant to section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act, so as to require the imposition or continuation of a private mortgage insurance requirement beyond the terms specified in subsection (a) or (b) of section 3; or (B) as determined by the mortgagee in the case of any other mortgage, except that termination shall occur— (i) with respect to a fixed rate mortgage, on the date on which the principal balance of the mortgage, based solely on the initial amortization schedule for that mortgage, and irrespective of the outstanding balance for that mortgage on that date, is first scheduled to reach 77 percent of the original value of the property securing the loan; and (ii) with respect to an adjustable rate mortgage, on the date on which the principal balance of the mortgage, based solely on amortization schedules for that mortgage, and irrespective of the outstanding balance for that mortgage on that date, is first scheduled to reach 77 percent of the original value of the property securing the loan. (2) Termination at midpoint.— A private mortgage insurance requirement in connection with a residential mortgage or mortgage transaction described in paragraph (1) shall terminate in accordance with subsection (c). (3) Rule of construction.— Nothing in this subsection may be construed to require a mortgage or mortgage transaction described in paragraph (1)(A) to be purchased by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. (4) Gao report.— Not later than 2 years after the date Deadline. of the enactment of this Act, the Comptroller General of the United States shall submit to the Congress a report describing the volume and characteristics of residential mortgages and residential mortgage transactions that, pursuant to paragraph (1) of this subsection, are exempt from the application of subsections (a) and (b). The report shall— (A) determine the number or volume of such mortgages and transactions compared to residential mortgages and residential mortgage transactions that are not classified as high-risk for purposes of paragraph (1); and (B) identify the characteristics of such mortgages and transactions that result in their classification (for purposes of paragraph (1)) as having high risks associated with the extension of the loan and describe such characteristics, including— (i) the income levels and races of the mortgagors involved; (ii) the amount of the downpayments involved and the downpayments expressed as percentages of the acquisition costs of the properties involved; (iii) the types and locations of the properties involved; (iv) the mortgage principal amounts; and (v) any other characteristics of such mortgages and transactions that may contribute to their classification as high risk for purposes of paragraph (1), including whether such mortgages are purchase-money mortgages or refinancings and whether and to what extent such loans are low-documentation loans.

2. 2000

   Private Mortgage Insurance Technical Corrections and Clarification Act

   Pub. L. 106–569 § 404(1)(A) · 114 Stat. 2944

   Inserted · 12 U.S.C. § 4902(a)

   Pub. L. 106–569, § 404(1)(A), inserted “or any later date that the mortgagor fulfills all of the requirements under paragraphs (1) through (4)” after “cancellation date” in introductory provisions

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 106–569, § 404(1)(A), inserted “or any later date that the mortgagor fulfills all of the requirements under paragraphs (1) through (4)” after “cancellation date” in introductory provisions.

   Enacted provision · exact public law section
   (A) in the matter preceding paragraph (1), by inserting after “cancellation date” the following: “or any later date that the mortgagor fulfills all of the requirements under paragraphs (1) through (4)”;

3. 2000

   Private Mortgage Insurance Technical Corrections and Clarification Act

   Pub. L. 106–569 § 404(1)(B) · 114 Stat. 2944

   1. Added · 12 U.S.C. § 4902(a)(3); 12 U.S.C. § 4902(a)(4)

      Pub. L. 106–569, § 404(1)(B)–(D), added par. (3)

   2. Redesignated · 12 U.S.C. § 4902(a)(3); 12 U.S.C. § 4902(a)(4)

      Pub. L. 106–569, § 404(1)(B)–(D), redesignated former par. (3) as (4)

   Source evidence

   Code amendment note
   Subsec. (a)(3), (4). Pub. L. 106–569, § 404(1)(B)–(D), added par. (3) and redesignated former par. (3) as (4).

   Enacted provision · exact public law section
   (B) in paragraph (2), by striking “and” at the end;

4. 2000

   Private Mortgage Insurance Technical Corrections and Clarification Act

   Pub. L. 106–569 § 405(b) · 114 Stat. 2944

   Amended · 12 U.S.C. § 4902(b)(2)

   Pub. L. 106–569, § 405(b), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “on the date after the termination date on which the mortgagor becomes current on the payments required by the terms of the residential mortgage transaction.”

   Source evidence

   Code amendment note
   Subsec. (b)(2). Pub. L. 106–569, § 405(b), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “on the date after the termination date on which the mortgagor becomes current on the payments required by the terms of the residential mortgage transaction.”

   Enacted provision · exact public law section
   (b) Automatic Termination.— Paragraph (2) of section 3(b) of the Homeowners Protection Act of 1998 (12 U.S.C. 4902(b)(2)) is amended to read as follows: “(2) if the mortgagor is not current on the termination date, on the first day of the first month beginning after the date that the mortgagor becomes current on the payments required by the terms of the residential mortgage transaction.”.

5. 2000

   Private Mortgage Insurance Technical Corrections and Clarification Act

   Pub. L. 106–569 § 403(a)(1) · 114 Stat. 2944

   Inserted · 12 U.S.C. § 4902(c)

   Pub. L. 106–569, § 403(a)(1), inserted “on residential mortgage transactions” after “requirement be imposed”

   Source evidence

   Code amendment note
   Subsec. (c). Pub. L. 106–569, § 403(a)(1), inserted “on residential mortgage transactions” after “requirement be imposed”.

   Enacted provision · exact public law section
   (1) in subsection (c), by inserting “on residential mortgage transactions” after “imposed”; and

6. 2000

   Private Mortgage Insurance Technical Corrections and Clarification Act

   Pub. L. 106–569 § 402(c)(1)(B) · 114 Stat. 2944

   Redesignated · 12 U.S.C. § 4902(d)

   Pub. L. 106–569, § 402(c)(1)(B), added subsec. (d). Former subsec. (d) redesignated (e)

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 106–569, § 402(c)(1)(B), added subsec. (d). Former subsec. (d) redesignated (e).

   Enacted provision · exact public law section
   (B) by inserting after subsection (c) the following new subsection: “(d) Treatment of Loan Modifications.— If a mortgagor and mortgagee (or holder of the mortgage) agree to a modification of the terms or conditions of a loan pursuant to a residential mortgage transaction, the cancellation date, termination date, or final termination shall be recalculated to reflect the modified terms and conditions of such loan.”.

7. 2000

   Private Mortgage Insurance Technical Corrections and Clarification Act

   Pub. L. 106–569 § 402(c)(1)(A) · 114 Stat. 2944

   Redesignated · 12 U.S.C. § 4902(e)

   Pub. L. 106–569, § 402(c)(1)(A), redesignated subsec. (d) as (e). Former subsec. (e) redesignated (f)

   Source evidence

   Code amendment note
   Subsec. (e). Pub. L. 106–569, § 402(c)(1)(A), redesignated subsec. (d) as (e). Former subsec. (e) redesignated (f).

   Enacted provision · exact public law section
   (A) by redesignating subsections (d) through (f) as subsections (e) through (g), respectively; and

8. 2000

   Private Mortgage Insurance Technical Corrections and Clarification Act

   Pub. L. 106–569 § 404(2) · 114 Stat. 2944

   Substituted · 12 U.S.C. § 4902(e)(1)(B)

   Pub. L. 106–569, § 404(2), substituted “subsection (a)(4)” for “subsection (a)(3)”

   Source evidence

   Code amendment note
   Subsec. (e)(1)(B). Pub. L. 106–569, § 404(2), substituted “subsection (a)(4)” for “subsection (a)(3)”.

   Enacted provision · exact public law section
   (2) in subsection (e)(1)(B) (as so redesignated by the preceding provisions of this title), by striking “subsection (a)(3)” and inserting “subsection (a)(4)”.

9. 2000

   Private Mortgage Insurance Technical Corrections and Clarification Act

   Pub. L. 106–569 § 402(c)(1)(A) · 114 Stat. 2944

   Redesignated · 12 U.S.C. § 4902(f)

   Pub. L. 106–569, § 402(c)(1)(A), redesignated subsec. (e) as (f). Former subsec. (f) redesignated (g)

   Source evidence

   Code amendment note
   Subsec. (f). Pub. L. 106–569, § 402(c)(1)(A), redesignated subsec. (e) as (f). Former subsec. (f) redesignated (g).

   Enacted provision · exact public law section
   (A) by redesignating subsections (d) through (f) as subsections (e) through (g), respectively; and

10. 2000

    Private Mortgage Insurance Technical Corrections and Clarification Act

    Pub. L. 106–569 § 402(a)(2) · 114 Stat. 2944

    Substituted · 12 U.S.C. § 4902(f)(1)(B)(ii)

    Pub. L. 106–569, § 402(a)(2), substituted “the amortization schedule then in effect” for “amortization schedules”

    Source evidence

    Code amendment note
    Subsec. (f)(1)(B)(ii). Pub. L. 106–569, § 402(a)(2), substituted “the amortization schedule then in effect” for “amortization schedules”.

    Enacted provision · exact public law section
    (2) in section 3(f)(1)(B)(ii), by striking “amortization schedules” and inserting “the amortization schedule then in effect”.

11. 2000

    Private Mortgage Insurance Technical Corrections and Clarification Act

    Pub. L. 106–569 § 402(c)(1)(A) · 114 Stat. 2944

    Redesignated · 12 U.S.C. § 4902(g)

    Pub. L. 106–569, § 402(c)(1)(A), redesignated subsec. (f) as (g)

    Source evidence

    Code amendment note
    Subsec. (g). Pub. L. 106–569, § 402(c)(1)(A), redesignated subsec. (f) as (g).

    Enacted provision · exact public law section
    (A) by redesignating subsections (d) through (f) as subsections (e) through (g), respectively; and

12. 2000

    Private Mortgage Insurance Technical Corrections and Clarification Act

    Pub. L. 106–569 § 403(a)(2)(A) · 114 Stat. 2944

    Struck · 12 U.S.C. § 4902(g)(1)

    Pub. L. 106–569, § 403(a)(2)(A), struck out “mortgage or” after “do not apply to any residential” in introductory provisions

    Source evidence

    Code amendment note
    Subsec. (g)(1). Pub. L. 106–569, § 403(a)(2)(A), struck out “mortgage or” after “do not apply to any residential” in introductory provisions.

    Enacted provision · exact public law section
    (A) in paragraph (1), in the matter preceding subparagraph (A), by striking “mortgage or”;

13. 2000

    Private Mortgage Insurance Technical Corrections and Clarification Act

    Pub. L. 106–569 § 403(a)(2)(B) · 114 Stat. 2944

    Struck · 12 U.S.C. § 4902(g)(2)

    Pub. L. 106–569, § 403(a)(2)(B), struck out “mortgage or” after “in connection with a residential”

    Source evidence

    Code amendment note
    Subsec. (g)(2). Pub. L. 106–569, § 403(a)(2)(B), struck out “mortgage or” after “in connection with a residential”.

    Enacted provision · exact public law section
    (B) in paragraph (2), by striking “mortgage or”; and

14. 2000

    Private Mortgage Insurance Technical Corrections and Clarification Act

    Pub. L. 106–569 § 403(a)(2)(C) · 114 Stat. 2944

    Substituted · 12 U.S.C. § 4902(g)(3)

    Pub. L. 106–569, § 403(a)(2)(C), substituted “residential mortgage or residential” for “mortgage or”

    Source evidence

    Code amendment note
    Subsec. (g)(3). Pub. L. 106–569, § 403(a)(2)(C), substituted “residential mortgage or residential” for “mortgage or”.

    Enacted provision · exact public law section
    (C) in paragraph (3), by striking “mortgage or” and inserting “residential mortgage or residential”.

15. 2000

    Private Mortgage Insurance Technical Corrections and Clarification Act

    Pub. L. 106–569 § 405(c) · 114 Stat. 2944

    Added · 12 U.S.C. § 4902(h)

    Pub. L. 106–569, § 405(c), added subsec. (h)

    Source evidence

    Code amendment note
    Subsec. (h). Pub. L. 106–569, § 405(c), added subsec. (h).

    Enacted provision · exact public law section
    (c) Premium Payments.— Section 3 of the Homeowners Protection Act of 1998 (12 U.S.C. 4902) is amended by adding at the end the following new subsection: “(h) Accrued Obligation for Premium Payments.— The cancellation or termination under this section of the private mortgage insurance of a mortgagor shall not affect the rights of any mortgagee, servicer, or mortgage insurer to enforce any obligation of such mortgagor for premium payments accrued prior to the date on which such cancellation or termination occurred.”.

16 of 16 references resolved to an enrolled provision