I recently refinanced my home. At the time based on the appraisal vs. amortization I found I would be stuck with PMI (private mortgage insurance) for about 9 months.
I've paid extra on the mortgage each month and after 7 months I got my LTV (loan-to-value ratio) to be 79%. Yay! So I called Pacific Union and asked for PMI to be removed.
The woman said I'd need to fax in a written request. Then she added that my written request would likely be denied because my account had not been in good standing the last 12 months. I pointed out that I'd only had the loan for 7 months and had never been late, but that didn't seem to matter to her.
So I faxed in my written request. Then I read through all my documentation on my loan. Nowhere did it say that I needed to have the loan for 12 months.
After a week I called them back and they said it would be another week for a decision.
So, I waited another week and called. They now just had a recording saying they were too busy to take a call and I could leave a callback number. I did this and never heard back. I've now tried twice more to call them. Each time I leave a number and each time I don't hear back. So I've fired off a written request again.
At this point we've gone around the horn to the next month and in two short days I'll be paying PMI on March's payment.
Do they have any grounds to not remove PMI? Isn't it federally mandated that PMI must be removed at 80%? Any recourse anyone can think of?
[EDIT] - I heard back from Pacific Union. They state that I did not sign anything agreeing to these terms which is what I was certain of. They state these terms are simply automatic with Fannie Mai backed loans and it doesn't matter if I was informed or not about these terms. They also chose not to hide behind the "no late payments" clause and instead said they were requiring an appraisal to remove PMI. Of course an appraisal is $400 and I'll hit 78% LTV before I would pay that much extra in PMI. I have now contacted a lawyer. I'll update again with whatever opinion the lawyer has and whether I proceed or not.
[EDIT] - I filed a BBB complaint. They waited 30+ days to respond. In their response they indicate that the first woman (and some SE users below) are wrong. The loan does NOT have to be in good standing for 12 months. The loan simply needs no late payments within 12 months. They then hide behind the request for another appraisal as the sole reason to not remove it. I checked with Fannie Mae who backs the loan and was told this is optional per the lender, however the lender can force it and I have no recourse. Additionally, they could have asked for a Broker's Price Option (BPO) or a certificate of value which would cost me hundreds less.
At this point I cannot continue to fight them because the amount of PMI I'll pay until 78% LTV is equal to or less than the appraisal cost of $400.
[EDIT] As of August 2015 I've hit 78% LTV. I called Pacific Union to ensure that the automatic cancellation of PMI had happened. They said no, I'd need to request that in writing. This is a violation of federal law as it's supposed to be automatic. They also said they would still deny it because now they want 24 months of good history. I've sent a threatening letter off and am waiting for a reply. If any lawyers come along and read this I'd sure like to hire you.
[EDIT] After my letter they said they would remove PMI. They did not and I was charged again in September. I called them yet again and complained. They said PMI was going to be removed. They then charged my again in October! I called again. I called again and went berserk on the phone. PMI was finally removed for November 2015. First month without it.