Finance
A Tennessee lender providing a mortgage must comply with the Homeowner Protection Act of 1998, which requires automatic cancellation of PMI when:
AThe loan is 3 years old
BThe loan balance reaches 78% of the original purchase price or appraised value✓ Correct
CThe borrower's credit score improves to 750
DThe lender refinances the loan
Explanation
The Homeowners Protection Act requires lenders to automatically cancel PMI when the loan balance reaches 78% of the original value (based on the original amortization schedule). Borrowers can also request cancellation when they reach 80% LTV.
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