Finance
What is the 'Homeowners Protection Act' (HPA) and how does it benefit Delaware borrowers with PMI?
AA Delaware state law protecting homeowners from HOA foreclosures
BA federal law requiring lenders to automatically cancel PMI when the borrower's equity reaches 22% of the original value, and allowing borrowers to request cancellation at 20% equity✓ Correct
CA federal law protecting homeowners from mortgage fraud
DA Delaware law requiring lenders to offer fixed-rate loans to all borrowers
Explanation
The Homeowners Protection Act (HPA, 1998) requires lenders to: (1) automatically cancel PMI when the LTV reaches 78% based on the original amortization schedule, and (2) allow borrowers to request cancellation when LTV reaches 80% based on payments (with good payment history). Delaware PMI borrowers benefit from knowing these rights to eliminate costly PMI when eligible.
Related Delaware Finance Questions
- What is 'underwriting' in the mortgage lending process?
- What is 'mortgage fraud' and what are the consequences under Delaware and federal law?
- Which type of loan is specifically designed for veterans and active-duty military service members?
- What is a 'note rate' versus the 'annual percentage rate' (APR) on a Delaware mortgage?
- What is the debt-to-income ratio used for in mortgage underwriting?
- What is a 'jumbo loan' in Delaware mortgage financing?
- What is the purpose of a mortgage in a real estate transaction?
- A conventional mortgage loan is one that is:
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →