Real estate experts: I have a PMI question....

[Martinjmpr]

Hey, I figure there are probably a few folks here who are real estate specialists, agents, mortgage brokers or attorneys so I wanted to ask a question about PMI:

We bought our house in February (closed 2/10) before we sold our old home so we financed 95%, which of course meant we had to get PMI. We did a "recast" loan that gave us the option to, in essence, do a one-time refinance without having to go through the refinance process so that we could apply the proceeds of selling our old house.

Old house sold in March (it was literally on the market for 7 1/2 hours!) and we paid down our mortgage to the point where our loan-to-value is well below 50%. This happened in April. We did our Recast paperwork and our mortgage payment dropped by half but PMI is still on there. I contacted the loan company (the loan was sold right after we closed) and they told me I had to request that PMI be dropped in writing. This has all been done and I've been nagging the finance company about whether they received my request (as of last week they hadn't but I'm sending them another email that will get to them tomorrow.)

I have no doubt they will drop the PMI, my question, for the experts, is this:

My next payment is due on 7/1, with the PMI showing on the statement. Assuming that I don't get something in writing telling me that PMI is dropped, should I

(a) Just pay it for this month?

Or should I figure that since I meet the requirements under which lenders have to drop PMI, so

(b) Just subtract the PMI from the payment and pay the rest?

If I do A and PMI is effectively cancelled after my 7/1 payment is due, will they refund my PMI payment? Or, worse case, let's say they drag their feet and they don't drop the PMI until August - is there any way to recover my PMI payments that were (IMO wrongfully) charged to the loan?

If I do B are they likely to report me to a credit bureau or mark me as "not in good standing" with regard to the loan? Any other negative repercussions?

It's not a huge amount, but it's not nothing, either, and I'm damn sure not going to pay it if I don't have to.

Thanks in advance for any advice! [Beer]

[Great-Kazoo]

Pay it. Until it's gone and you have written notification to confirm. It's easier to pay and receive credit or a check back, then deal with the associated b.s.

[Madeinhb]

Pay it. Until it's gone and you have written notification to confirm. It's easier to pay and receive credit or a check back, then deal with the associated b.s.

Second this. Don't want to screw credit up over it.

[Wulf202]

Pay it.

[Martinjmpr]

OK, makes sense but if they credit it back, what date do they go back to? The date that the L-to-V dropped below 78% or the day that I sent the letter asking it to be dropped?

[Wulf202]

Whichever makes them more money......

[ChunkyMonkey]

Whichever makes them more money......

LOL

Yes, pay whats due on paper. You can always get credit.

[Madeinhb]

Would probably go back to what you paid. Could get credit back or apply to principal

[MarkCO]

80% LTV, you can request it. At 78% they must drop it automatically on some loan types. But the rules vary by loan type. For most loans, the only way that does not hold true is in the exception that the Value has dropped since the loan origination. I can't see as how they could make that argument in your case. Some loans do not let PMI go away until 2 to 5 years after origination, regardless of LTV. With FHA loans, you usually have to refinance. The terms should all be spelled out in one of the closing docs.

But yes, pay it and if they don't fix it, and they are wrong, call the AG office and ask for assistance.