Finance
What is 'private mortgage insurance' (PMI) cancellation rights for Illinois homeowners?
APMI can be cancelled any time after the first year
BThe Homeowners Protection Act requires automatic cancellation when the LTV reaches 78% based on the original value, and borrowers can request cancellation at 80% LTV✓ Correct
CPMI cannot be cancelled on any Illinois mortgage
DPMI automatically cancels after 5 years regardless of equity
Explanation
The Homeowners Protection Act (HPA) governs PMI cancellation. Borrowers can request cancellation when equity reaches 20% (80% LTV based on original value). Lenders must automatically cancel PMI when the LTV reaches 78% based on original value and payments are current. For FHA loans, MIP generally cannot be cancelled unless the borrower refinances into a conventional loan (for loans originated after June 2013 with less than 10% down).
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