Topic: Private Mortgage Insurance
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Does the Illinois Mortgage Escrow Account act apply to escrow accounts set up to pay private mortgage insurance (PMI), or does it apply only to real estate tax escrow accounts?
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We believe that the Mortgage Escrow Account Act applies only to escrow accounts that hold funds for purposes of paying property taxes. If an escrow account holds funds only for purposes of paying PMI premiums, we do not believe that the Act would apply. But if an escrow account holds funds for purposes of paying…
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Can we charge a cancellation fee when customers elect to terminate their escrow accounts? What about a fee to obtain the current property value when customers cancel their private mortgage insurance (PMI)?
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We are not aware of any law or regulation that prevents you from charging either fee. Regarding the escrow cancellation fee, the Illinois Mortgage Escrow Account Act does not address whether a mortgage lender may charge a fee for terminating an escrow account at the consumer’s request (e.g., when the when the mortgage is reduced…
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When filling out the new Loan Estimate form, where should we place the following fees? (1) FHA initial mortgage insurance premium, (2) VA initial funding fee, and (3) Conventional Single Premium Borrower/Lender Paid Mortgage Insurance.
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We believe that all three fees should be disclosed under “Services You Cannot Shop For.” The Regulation Z Official Interpretations state that “government funding fees” and “upfront mortgage insurance fees” should be listed on the Closing Disclosure under the heading “Services You Cannot Shop For.” The FHA and VA fees are government funding fees, since…