Finance
In Alaska, the 'Homeowners Protection Act' (HPA) requires private mortgage insurance (PMI) to be cancelled when:
AThe borrower requests it after 2 years
BThe loan-to-value ratio reaches 80% based on the original value and amortization schedule✓ Correct
CThe property appreciates to 120% of the original purchase price
DThe borrower refinances the loan
Explanation
The HPA requires lenders to automatically terminate PMI when the loan balance reaches 78% of the original property value (based on the amortization schedule). Borrowers may request cancellation earlier when the balance reaches 80% LTV, provided they have a good payment history.
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