Does the Homeowners Protection Act and the PMI Drop Off at 78% Apply to Second Homes?
The Homeowners Protection Act of 1998 (HPA) governs the circumstances under which borrowers may request that Private Mortgage Insurance (PMI) be terminated and when lenders must terminate PMI. The provisions of HPA apply only in certain circumstances. Specifically, HPA applies to “residential mortgage transactions.” The key definitions in HPA are “residential mortgage” and “single-family dwelling”: (15) Residential mortgage transaction – The term “residential mortgage transaction” means a transaction consummated on or after the date that is 1 year after July 29, 1998, in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against a single-family dwelling that is the principal residence of the mortgagor to finance the acquisition, initial construction, or refinancing of that dwelling. (14) Residential mortgage – The term “residential mortgage” means a mortgage, lo
