|List By Date|
|Health Care and Entitlements|
New Law Offers Break For Homeowners Overburdened With Private
Mortgage Insurance, Says CCH>
(RIVERWOODS, ILL., June 24, 1999) A new law promises to provide
some relief for mortgage holders. Starting in July, homeowners wont be forced to
maintain private mortgage insurance (PMI) for the life of their loans, according to CCH
INCORPORATED, a leading provider of banking, securities and financial law information.
The insurance is usually required when homebuyers make a down payment of less than 20
percent on their homes. CCH points out that effective July 29, 1999, borrowers with good
payment histories will have the right to cancel their PMI when their principal balance
falls to 80 percent of the original value of their property. Whats more, the
Homeowners Protection Act of 1998 says lenders will be required to terminate PMI when the
principal balance hits 78 percent. The provisions apply only to new mortgages made after
the effective date of the Act, CCH noted.
According to Ken Benson, J.D., banking law analyst with CCH Federal Banking Reports,
lenders must supply homeowners with annual notices of their cancellation and termination
rights. The notice must indicate when, under the amortization schedule for the loan, the
80 percent point will be reached.
"Homeowners who are running ahead of the amortization schedule because of extra
principal payments can request cancellation when their actual principal balance reaches 80
percent," Benson added.
To qualify for early cancellation, however, CCH says buyers must have a good payment
history, meaning that no payments were more than 60 days late during the two years before
the cancellation date and no payments were more than 30 days late during the year prior to
cancellation. The automatic termination is also deferred for borrowers who have fallen
behind in their payments.
About CCH INCORPORATED
CCH INCORPORATED, headquartered in Riverwoods, Ill., was founded in 1913 and has
served four generations of business professionals and their clients. The company produces
more than 700 electronic and print products for the tax, legal, banking, securities, human
resources, healthcare and small business markets. CCH is a wholly owned subsidiary of
Wolters Kluwer U.S. The CCH web site can be accessed at www.cch.com.
-- ### --