Private Mortgage Insurance Cancellation

Your guide to Cancelling MI in accordance with the Homeowners Protection Act of 1998

Effective July 29, 1999, the Homeowners Protection Act (HPA or Act) requires that private mortgage insurance be cancelled when a loan reaches certain, specified thresholds. The Act’s MI cancellation policy applies to privately insured first mortgages:

  • on single-family, primary residences, AND
  • closed on or after July 29, 1999, AND
  • for the purpose of financing the acquisition, initial construction or refinancing of the dwelling.

Following the HPA’s lead, Fannie Mae and Freddie Mac have  updated their own MI cancellation policies, in accordance with the Act, for privately insured first mortgages.

This overview highlights the Act and Fannie Mae and Freddie Mac policies. It is not intended nor should it be construed to serve as legal advice or a legal opinion. The law is very detailed, and commentary is not provided for every section of the law. Your organization will need to obtain a copy of the law and consult with your own independent counsel to assure compliance.

As to the sections dealing with Fannie Mae/Freddie Mac requirements for cancellation, while MGIC believes the information to be accurate on the basis of their respective Seller/Servicer Guides, it should not be relied upon as such, and there may be additional requirements applied by Fannie Mae or Freddie Mac not reflected in those Guides. In all such instances, reference should be made to the specific sections of the Fannie Mae/Freddie Mac Seller/Servicer Guides.

Modifications: If the servicer and the borrower agree to modify the loan, the cancellation, termination and final termination dates must be recalculated to reflect the modification.

Download the guide, “HPA Homeowners Protection Act of 1998 – Private Mortgage Insurance Cancellation”