source:
  type: statute
  id: hpa-12usc-4901-4
  authority: 12 U.S.C. §4902 — Cancellation and termination of private mortgage insurance
    (Homeowners Protection Act)
  description: 12 U.S.C. §4902 — Cancellation and termination of private mortgage
    insurance (Homeowners Protection Act).
  coverage_tier: operative
obligations:
- id: hpa-12usc-4901-4-4902
  canonical_id: hpa-12usc-4901-4-4902
  section: 12 U.S.C. §4902 — Cancellation and termination of private mortgage insurance
    (Homeowners Protection Act)
  type: do
  tags:
  - regulator-direct
  - federal-statute
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: 12 U.S.C. §4902 — Cancellation and termination of private mortgage
      insurance (Homeowners Protection Act)
    source_class: usc-statute
    source_url: https://www.law.cornell.edu/uscode/text/12/4902
    snapshot_id: 7b4f49d71c1a7a34
    fetched_at: '2026-05-24T00:46:52Z'
    content_hash: sha256:903ce36c677376ced642986828cc47c4326e5498fde9199a2cea79a8a92825fc
    paragraph_quote: (a) Borrower cancellation A requirement for private mortgage
      insurance in connection with a residential mortgage transaction shall be canceled
      on the cancellation date or any later date that the mortgagor fulfills all of
      the requirements under paragraphs (1) through (4), if the mortgagor— (1) submits
      a request in writing to the servicer that cancellation be initiated; (2) has
      a good payment history with respect to the residential mortgage; (3) is current
      on the payments required by the terms of the residential mortgage transaction
      ; and (4) has satisfied any requirement of the holder of the mortgage (as of
      the date of a request under paragraph (1)) for— (A) evidence (of a type established
      in advance and made known to the mortgagor by the servicer promptly upon receipt
      of a request under paragraph (1)) that the value of the property securing the
      mortgage has not declined below the original value of the property; and (B)
      certification that the equity of the mortgagor in the residence securing the
      mortgage is unencumbered by a subordinate lien. (b) Automatic termination A
      requirement for private mortgage insurance in connection with a residential
      mortgage transaction shall terminate with respect to payments for that mortgage
      insurance made by the mortgagor— (1) on the termination date if, on that date,
      the mortgagor is current on the payments required by the terms of the residential
      mortgage transaction ; or (2) if the mortgagor is not current on the termination
      date , on the first day of the first month beginning after the date that the
      mortgagor becomes current on the payments required by the terms of the residential
      mortgage transaction . (c) Final termination If a requirement for private mortgage
      insurance is not otherwise canceled or terminated in accordance with subsection
      (a) or (b), in no case may such a requirement be imposed on residential mortgage
      transactions beyond the first day of the month immediately following the date
      that is the midpoint of the amortization period of the loan if the mortgagor
      is current on the payments required by the terms of the mortgage. (d) Treatment
      of loan modifications If a mortgagor and mortgagee (or holder of the mortgage)
      agree to a modification of the terms or conditions of a loan pursuant to a residential
      mortgage transaction , the cancellation date, termination date, or final termination
      shall be recalculated to reflect the modified terms and conditions of such loan.
      (e) No further payments No payments or premiums may be required from the mortgagor
      in connection with a private mortgage insurance requirement terminated or canceled
      under this section— (1) in the case of cancellation under subsection (a), more
      than 30 days after the later of— (A) the date on which a request under subsection
      (a)(1) is received; or (B) the date on which the mortgagor satisfies any evidence
      and certification requirements under subsection (a)(4); (2) in the case of termination
      under subsection (b), more than 30 days after the termination date or the date
      referred to in subsection (b)(2), as applicable; and (3) in the case of termination
      under subsection (c), more than 30 days after the final termination date established
      under that subsection. (f) Return of unearned premiums (1) In general Not later
      than 45 days after the termination or cancellation of a private mortgage insurance
      requirement under this section, all unearned premiums for private mortgage insurance
      shall be returned to the mortgagor by the servicer. (2) Transfer of funds to
      servicer Not later than 30 days after notification by the servicer of termination
      or cancellation of private mortgage insurance under this chapter with respect
      to a mortgagor, a mortgage insurer that is in possession of any unearned premiums
      of that mortgagor shall transfer to the servicer of the subject mortgage an
      amount equal to the amount of the unearned premiums for repayment in accordance
      with paragraph (1). (g) Exceptions for high risk loans (1) In general The termination
      and cancellation provisions in subsections (a) and (b) do not apply to any residential
      mortgage transaction that, at the time at which the residential mortgage transaction
      is consummated, has high risks associated with the extension of the loan— (A)
      as determined in accordance with guidelines published by the Federal National
      Mortgage Association and the Federal Home Loan Mortgage Corporation, in the
      case of a mortgage loan with an original principal balance that does not exceed
      the applicable annual conforming loan limit for the secondary market established
      pursuant to section 1454(a)(2) of this title , so as to require the imposition
      or continuation of a private mortgage insurance requirement beyond the terms
      specified in subsection (a) or (b) of this section; or (B) as determined by
      the mortgagee in the case of any other mortgage, except that termination shall
      occur— (i) with respect to a fixed rate mortgage , on the date on which the
      principal balance of the mortgage, based solely on the initial amortization
      schedule for that mortgage, and irrespective of the outstanding balance for
      that mortgage on that date, is first scheduled to reach 77 percent of the original
      value of the property securing the loan; and (ii) with respect to an adjustable
      rate mortgage , on the date on which the principal balance of the mortgage,
      based solely on the amortization schedule then in effect for that mortgage,
      and irrespective of the outstanding balance for that mortgage on that date,
      is first scheduled to reach 77 percent of the original value of the property
      securing the loan. (2) Termination at midpoint A private mortgage insurance
      requirement in connection with a residential mortgage transaction described
      in paragraph (1) shall terminate in accordance with subsection (c). (3) Rule
      of construction Nothing in this subsection may be construed to require a residential
      mortgage or residential mortgage transaction described in paragraph (1)(A) to
      be purchased by the Federal National Mortgage Association or the Federal Home
      Loan Mortgage Corporation. (4) GAO report Not later than 2 years after July
      29, 1998 , the Comptroller General of the United States shall submit to the
      Congress a report describing the volume and characteristics of residential mortgages
      and residential mortgage transactions that, pursuant to paragraph (1) of this
      subsection, are exempt from the application of subsections (a) and (b). The
      report shall— (A) determine the number or volume of such mortgages and transactions
      compared to residential mortgages and residential mortgage transactions that
      are not classified as high-risk for purposes of paragraph (1); and (B) identify
      the characteristics of such mortgages and transactions that result in their
      classification (for purposes of paragraph (1)) as having high risks associated
      with the extension of the loan and describe such characteristics, including—
      (i) the income levels and races of the mortgagors involved; (ii) the amount
      of the downpayments involved and the downpayments expressed as percentages of
      the acquisition costs of the properties involved; (iii) the types and locations
      of the properties involved; (iv) the mortgage principal amounts; and (v) any
      other characteristics of such mortgages and transactions that may contribute
      to their classification as high risk for purposes of paragraph (1), including
      whether such mortgages are purchase-money mortgages or refinancings and whether
      and to what extent such loans are low-documentation loans. (h) Accrued obligation
      for premium payments The cancellation or termination under this section of the
      private mortgage insurance of a mortgagor shall not affect the rights of any
      mortgagee, servicer, or mortgage insurer to enforce any obligation of such mortgagor
      for premium payments accrued prior to the date on which such cancellation or
      termination occurred. ( Pub. L. 105–216, § 3 , July 29, 1998 , 112 Stat. 899
      ; Pub. L. 106–569, title IV , §§ 402(a)(2), (c)(1), 403(a), 404, 405(b), (c),
      Dec. 27, 2000 , 114 Stat. 2956–2958 .)
  judgment: false
