****** ****, the broker, lied regarding the PMI payments and when I would be eligible to stop paying PMI, which lead me to refinance.
I refinanced my property with this Company. ****** ****, the broker, told me numerous times that once i reach the 5 year mark of being in an FHA loan on the same property and 78% loan to value ratio, I can ask the loan holder to assess and take away the PMI portion of my monthly payment. I specifically asked if i need to be in the same loan for 5 years, to which he repeatedly told me no. I have come to find out he was lying. The only reason I refinanced, even though it doubled the PMI portion of my payment, is because I was led to believe that after one year (which makes it 5 years overall), I could call the debt holder and have the PMI portion removed. I closed my refin in Dec 2012.
If what ****** promised me is true, I would like info from the Company so I can work with my lender to get my PMI removed. If he lied (which in my discussions with HUD, it seems that he lied), the Company should refi me to a conventional loan with the same interest rate at no cost to me, which is where I would today, if ******'s lies were true.
I have reviewed Mr. ****'s complaint as well as all documentation we have on file for him. The loan officer, ****** ****, is no longer an employee of the company. During his tenure with the company, I have not been witness to any complaints against Mr. ****. He has an extensive 10+ years of industry experience and is very knowledgeable and extremely trustworthy.
Mr. **** contacted me in September of 2013 regarding the cancelation of his monthly FHA Mortgage Insurance, I informed him that he needed to contact his current loan servicer to request it to be removed. He was noticeably upset at that time, however there was nothing I could do to satisfy him. As the originator we have no control over his loan, post funding.
There was no further communication with Mr. **** regarding this matter until the day he filed his complaint with the Better Business Bureau which was apprixmately 3 months after our original conversation. I spoke to Mr. **** the day he filed the complaint. He claimed that Mr. **** had lied to him (as he asserts in his complaint) and that he closed his loan with my firm because of a guarantee Mr. **** made regarding his mortgage insurance falling off. I asked Mr. **** to produce documentation regarding this guarantee and he was unable to do so. During my review of the correspondence with Mr. **** prior to his loan closing as well as the entire loan file, there is no indication that a guarantee was ever made. It should be noted that the loan program that Mr. **** provided Mr. **** was an FHA Streamline which saved him over $230 per month.
While researching this I made an interesting discovery. Mr. **** claims that he only refinanced his loan with Mr. **** because he was promised his mortgage insurance would be removed once he was 5 years into his participation in the FHA loan program. The loan that we paid off in December 2012 was originated August 10th, 2010 as evidenced by the note that was provided by Mr. ****'s lender at that time. Mr. **** should also be in possession of this document, as he signed it as part of this prior loan closing. If the guarantee to have the mortgage insurance removed after 5 years from the date of origination of the loan we paid off, he wouldn't be eligible to have the mortgage insurance removed until August 2015.
The removal of monthly FHA mortgage insurance premiums is handled by his loan servicer and HUD. HUD very specifically spells out the conditions under which this takes place. This information is readily available on www.hud.gov. More specifically the resource that Mr. **** should use to determine when his mortgage insurance will be cancelled is contained within mortgagee letter XXXX-XX which indicates the following:
For mortgages with terms more than 15 years, the annual mortgage insurance premiums will be canceled when the loan to value ratio reaches 78 percent, provided the mortgagor has paid the annual mortgage insurance premiums for at least five years.
I have had numerous conversations with Mr. **** after he filed this complaint with the Better Business Bureau and have explained to the best of my abilities what his options are. I am unable to effect his eligibility to have his mortgage insurance removed and have recommended he work with his current loan servicer to do so. I have offered to be a resource and to assist by looking into refinancing him into a loan that does not have mortgage insurance, assuming he qualifies.
I asked Mr. **** to resolve the complaint prior to us moving forward as I did not want to continue a business relationship with him if he was going to use your organization as leverage against my company. We contend that Mr. **** did nothing wrong and did not guarantee when Mr. ****'s mortgage insurance would be removed. He indicated he would communicate to the Better Business Bureau and let them know that his complaint had been resolved, however he also said that if we did not rectify his situation to his satisfaction that he would reopen the complaint.
I feel as though that Mr. **** is using your system to simply try to get what he wants, not for its intended use which I feel is to protect the general public from unscrupulous business practices.