A loan servicer is expected to request cancellation of borrower-paid MI (BPMI) when, with respect to a fixed-rate mortgage, the principal balance of the loan, based solely on the initial amortization schedule and irrespective of the outstanding balance for the loan, is first scheduled to reach 78% of the original value of the property, provided the loan is current on payments and all requirements of the Homeowners Protection Act of 1998 (HPA) are met.

With respect to a fixed-rate mortgage, when the loan balance based on the initial amortization schedule is first scheduled to reach 80% of the original value of the property or, based solely on actual payments, the loan balance reaches 80% of the original value of the property. To request cancellation the borrower must send a written request to the servicer, must have a good payment history, must be current on payments required by the terms of the mortgage transaction, must satisfy any requirement of the holder of the mortgage for evidence that the property value hasn’t declined below the original value and that the equity in the property is not subject to a subordinate lien.

Premium refunds may be available upon cancellation, depending on the specific situation.