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Second Home/Investment Property PMI

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  • January 13, 2020 at 12:30 pm EST #31441
    ADJ0819
    Participant

    Good Morning,
    Second home and investment properties are not covered by the Homeowners Protection Act. When the lender requires PMI on second homes and investment properties, should PMI be disclosed for the life of the loan AND are PMI disclosures required? There appears to be limited information about second home/investment and PMI out there. Thank you for your time.

    January 21, 2020 at 1:18 pm EST #31481
    rcooper
    Member

    Even if the Homeowners Protection Act doesn’t apply, state law, investor requirements, and your contract with the borrower all could affect if and when you are required to cancel pmi. Although there is not a lot of guidance, my understanding is you would disclose through the time when PMI is required to be terminated.

    January 21, 2020 at 2:37 pm EST #31489
    jholzknecht
    Keymaster

    In my experience lenders generally follow the HPA rules for all transactions, even those secured by second home and investment properties. Arguably not following the HPA rules could be an unfair act or practice.

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