---
kind: "range"
citation: "12 U.S.C. §§ 4902–4904"
title: "12"
from: "4902"
to: "4904"
count: 3
release: "119-102"
url: "https://uscodex.org/usc/12/4902..4904"
---

# §4902. Termination of private mortgage insurance

- (a) **Borrower cancellation—** A requirement for [private mortgage insurance](/usc/12/4901.md?p=13) in connection with a [residential mortgage transaction](/usc/12/4901.md?p=15) shall be canceled on the [cancellation date](/usc/12/4901.md?p=2) or any later date that the [mortgagor](/usc/12/4901.md?p=11) fulfills all of the requirements under [paragraphs (1) through (4)](#a-1..a-4), if the [mortgagor](/usc/12/4901.md?p=11)—
  - (1) submits a request in writing to the [servicer](/usc/12/4901.md?p=16) that cancellation be initiated;
  - (2) has a [good payment history](/usc/12/4901.md?p=4) with respect to the [residential mortgage](/usc/12/4901.md?p=14);
  - (3) is current on the payments required by the terms of the [residential mortgage transaction](/usc/12/4901.md?p=15); and
  - (4) has satisfied any requirement of the holder of the [mortgage](/usc/12/1707.md?p=a) (as of the date of a request under [paragraph (1)](#a-1)) for—
    - (A) evidence (of a type established in advance and made known to the [mortgagor](/usc/12/4901.md?p=11) by the [servicer](/usc/12/4901.md?p=16) promptly upon receipt of a request under [paragraph (1)](#a-1)) that the value of the property securing the [mortgage](/usc/12/1707.md?p=a) has not declined below the [original value](/usc/12/4901.md?p=12) of the property; and
    - (B) certification that the equity of the [mortgagor](/usc/12/4901.md?p=11) in the residence securing the [mortgage](/usc/12/1707.md?p=a) is unencumbered by a subordinate lien.
- (b) **Automatic termination—** A requirement for [private mortgage insurance](/usc/12/4901.md?p=13) in connection with a [residential mortgage transaction](/usc/12/4901.md?p=15) shall terminate with respect to payments for that [mortgage insurance](/usc/12/4901.md?p=8) made by the [mortgagor](/usc/12/4901.md?p=11)—
  - (1) on the [termination date](/usc/12/4901.md?p=18) if, on that date, the [mortgagor](/usc/12/4901.md?p=11) is current on the payments required by the terms of the [residential mortgage transaction](/usc/12/4901.md?p=15); or
  - (2) if the [mortgagor](/usc/12/4901.md?p=11) is not current on the [termination date](/usc/12/4901.md?p=18), on the first day of the first month beginning after the date that the [mortgagor](/usc/12/4901.md?p=11) becomes current on the payments required by the terms of the [residential mortgage transaction](/usc/12/4901.md?p=15).
- (c) **Final termination—** If a requirement for [private mortgage insurance](/usc/12/4901.md?p=13) is not otherwise canceled or terminated in accordance with subsection [(a)](#a) or [(b)](#b), in no case may such a requirement be imposed on [residential mortgage transactions](/usc/12/4901.md?p=15) beyond the first day of the month immediately following the date that is the [midpoint of the amortization period](/usc/12/4901.md?p=7) of the loan if the [mortgagor](/usc/12/4901.md?p=11) is current on the payments required by the terms of the [mortgage](/usc/12/1707.md?p=a).
- (d) **Treatment of loan modifications—** If a [mortgagor](/usc/12/4901.md?p=11) and [mortgagee](/usc/12/4901.md?p=10) (or holder of the [mortgage](/usc/12/1707.md?p=a)) agree to a modification of the terms or conditions of a loan pursuant to a [residential mortgage transaction](/usc/12/4901.md?p=15), the [cancellation date](/usc/12/4901.md?p=2), [termination date](/usc/12/4901.md?p=18), 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](/usc/12/4901.md?p=11) in connection with a [private mortgage insurance](/usc/12/4901.md?p=13) requirement terminated or canceled under this section—
  - (1) in the case of cancellation under [subsection (a)](#a), more than 30 days after the later of—
    - (A) the date on which a request under [subsection (a)(1)](#a-1) is received; or
    - (B) the date on which the [mortgagor](/usc/12/4901.md?p=11) satisfies any evidence and certification requirements under [subsection (a)(4)](#a-4);
  - (2) in the case of termination under [subsection (b)](#b), more than 30 days after the [termination date](/usc/12/4901.md?p=18) or the date referred to in [subsection (b)(2)](#b-2), as applicable; and
  - (3) in the case of termination under [subsection (c)](#c), more than 30 days after the final [termination date](/usc/12/4901.md?p=18) 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](/usc/12/4901.md?p=13) requirement under this section, all unearned premiums for [private mortgage insurance](/usc/12/4901.md?p=13) shall be returned to the [mortgagor](/usc/12/4901.md?p=11) by the [servicer](/usc/12/4901.md?p=16).
  - (2) **Transfer of funds to servicer—** Not later than 30 days after notification by the [servicer](/usc/12/4901.md?p=16) of termination or cancellation of [private mortgage insurance](/usc/12/4901.md?p=13) under this chapter with respect to a [mortgagor](/usc/12/4901.md?p=11), a [mortgage insurer](/usc/12/4901.md?p=9) that is in possession of any unearned premiums of that [mortgagor](/usc/12/4901.md?p=11) shall transfer to the [servicer](/usc/12/4901.md?p=16) of the subject [mortgage](/usc/12/1707.md?p=a) an amount equal to the amount of the unearned premiums for repayment in accordance with [paragraph (1)](#f-1).
- (g) **Exceptions for high risk loans—**
  - (1) **In general—** The termination and cancellation provisions in subsections [(a)](#a) and [(b)](#b) do not apply to any [residential mortgage transaction](/usc/12/4901.md?p=15) that, at the time at which the [residential mortgage transaction](/usc/12/4901.md?p=15) 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](/usc/12/1707.md?p=a) [Association](/usc/12/1828.md?p=s-4-E-i) and the Federal Home Loan [Mortgage](/usc/12/1707.md?p=a) [Corporation](/usc/12/2277a.md?p=2), in the case of a [mortgage](/usc/12/1707.md?p=a) 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](/usc/12/1454.md?p=a-2), so as to require the imposition or continuation of a [private mortgage insurance](/usc/12/4901.md?p=13) requirement beyond the terms specified in subsection [(a)](#a) or [(b)](#b) of this section; or
    - (B) as determined by the [mortgagee](/usc/12/4901.md?p=10) in the case of any other [mortgage](/usc/12/1707.md?p=a), except that termination shall occur—
      - (i) with respect to a [fixed rate mortgage](/usc/12/4901.md?p=3), on the date on which the principal balance of the [mortgage](/usc/12/1707.md?p=a), based solely on the [initial amortization schedule](/usc/12/4901.md?p=5) for that [mortgage](/usc/12/1707.md?p=a), and irrespective of the outstanding balance for that [mortgage](/usc/12/1707.md?p=a) on that date, is first scheduled to reach 77 percent of the [original value](/usc/12/4901.md?p=12) of the property securing the loan; and
      - (ii) with respect to an [adjustable rate mortgage](/usc/12/4901.md?p=1), on the date on which the principal balance of the [mortgage](/usc/12/1707.md?p=a), based solely on the [amortization schedule then in effect](/usc/12/4901.md?p=6) for that [mortgage](/usc/12/1707.md?p=a), and irrespective of the outstanding balance for that [mortgage](/usc/12/1707.md?p=a) on that date, is first scheduled to reach 77 percent of the [original value](/usc/12/4901.md?p=12) of the property securing the loan.
  - (2) **Termination at midpoint—** A [private mortgage insurance](/usc/12/4901.md?p=13) requirement in connection with a [residential mortgage transaction](/usc/12/4901.md?p=15) described in [paragraph (1)](#g-1) shall terminate in accordance with [subsection (c)](#c).
  - (3) **Rule of construction—** Nothing in this subsection may be construed to require a [residential mortgage](/usc/12/4901.md?p=14) or [residential mortgage transaction](/usc/12/4901.md?p=15) described in [paragraph (1)(A)](#g-1-A) to be purchased by the Federal National [Mortgage](/usc/12/1707.md?p=a) [Association](/usc/12/1828.md?p=s-4-E-i) or the Federal Home Loan [Mortgage](/usc/12/1707.md?p=a) [Corporation](/usc/12/2277a.md?p=2).
  - (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](/usc/12/4901.md?p=14) and [residential mortgage transactions](/usc/12/4901.md?p=15) that, pursuant to paragraph (1) of this subsection, are exempt from the application of subsections [(a)](#a) and [(b)](#b). The report shall—
    - (A) determine the number or volume of such [mortgages](/usc/12/1707.md?p=a) and transactions compared to [residential mortgages](/usc/12/4901.md?p=14) and [residential mortgage transactions](/usc/12/4901.md?p=15) that are not classified as high-risk for purposes of [paragraph (1)](#g-1); and
    - (B) identify the characteristics of such [mortgages](/usc/12/1707.md?p=a) and transactions that result in their classification (for purposes of [paragraph (1)](#g-1)) as having high risks associated with the extension of the loan and describe such characteristics, [including](/usc/12/25b.md?p=a-3)—
      - (i) the income levels and races of the [mortgagors](/usc/12/4901.md?p=11) 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](/usc/12/1707.md?p=a) principal amounts; and
      - (v) any other characteristics of such [mortgages](/usc/12/1707.md?p=a) and transactions that may contribute to their classification as high risk for purposes of [paragraph (1)](#g-1), [including](/usc/12/25b.md?p=a-3) whether such [mortgages](/usc/12/1707.md?p=a) are purchase-money [mortgages](/usc/12/1707.md?p=a) 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](/usc/12/4901.md?p=13) of a [mortgagor](/usc/12/4901.md?p=11) shall not affect the rights of any [mortgagee](/usc/12/4901.md?p=10), [servicer](/usc/12/4901.md?p=16), or [mortgage insurer](/usc/12/4901.md?p=9) to enforce any obligation of such [mortgagor](/usc/12/4901.md?p=11) for premium payments accrued prior to the date on which such cancellation or termination occurred.

# §4903. Disclosure requirements

- (a) **Disclosures for new mortgages at time of transaction—**
  - (1) **Disclosures for non-exempted transactions—** In any case in which [private mortgage insurance](/usc/12/4901.md?p=13) is required in connection with a [residential mortgage transaction](/usc/12/4901.md?p=15) (other than a [residential mortgage transaction](/usc/12/4901.md?p=15) described in [section 4902(g)(1) of this title](/usc/12/4902.md?p=g-1)), at the time at which the transaction is consummated, the [mortgagee](/usc/12/4901.md?p=10) shall provide to the [mortgagor](/usc/12/4901.md?p=11)—
    - (A) if the transaction relates to a [fixed rate mortgage](/usc/12/4901.md?p=3)—
      - (i) a written [initial amortization schedule](/usc/12/4901.md?p=5); and
      - (ii) written notice—
        - (I) that the [mortgagor](/usc/12/4901.md?p=11) may cancel the requirement in accordance with [section 4902(a) of this title](/usc/12/4902.md?p=a) indicating the date on which the [mortgagor](/usc/12/4901.md?p=11) may request cancellation, based solely on the [initial amortization schedule](/usc/12/4901.md?p=5);
        - (II) that the [mortgagor](/usc/12/4901.md?p=11) may request cancellation in accordance with [section 4902(a) of this title](/usc/12/4902.md?p=a) earlier than provided for in the [initial amortization schedule](/usc/12/4901.md?p=5), based on actual payments;
        - (III) that the requirement for [private mortgage insurance](/usc/12/4901.md?p=13) will automatically terminate on the [termination date](/usc/12/4901.md?p=18) in accordance with [section 4902(b) of this title](/usc/12/4902.md?p=b), and what that [termination date](/usc/12/4901.md?p=18) is with respect to that [mortgage](/usc/12/1707.md?p=a); and
        - (IV) that there are exemptions to the right to cancellation and automatic termination of a requirement for [private mortgage insurance](/usc/12/4901.md?p=13) in accordance with [section 4902(g) of this title](/usc/12/4902.md?p=g), and whether such an exemption applies at that time to that transaction; and
    - (B) if the transaction relates to an [adjustable rate mortgage](/usc/12/4901.md?p=1), a written notice that—
      - (i) the [mortgagor](/usc/12/4901.md?p=11) may cancel the requirement in accordance with [section 4902(a) of this title](/usc/12/4902.md?p=a) on the [cancellation date](/usc/12/4901.md?p=2), and that the [servicer](/usc/12/4901.md?p=16) will notify the [mortgagor](/usc/12/4901.md?p=11) when the [cancellation date](/usc/12/4901.md?p=2) is reached;
      - (ii) the requirement for [private mortgage insurance](/usc/12/4901.md?p=13) will automatically terminate on the [termination date](/usc/12/4901.md?p=18), and that on the [termination date](/usc/12/4901.md?p=18), the [mortgagor](/usc/12/4901.md?p=11) will be notified of the termination or that the requirement will be terminated as soon as the [mortgagor](/usc/12/4901.md?p=11) is current on loan payments; and
      - (iii) there are exemptions to the right of cancellation and automatic termination of a requirement for [private mortgage insurance](/usc/12/4901.md?p=13) in accordance with [section 4902(g) of this title](/usc/12/4902.md?p=g), and whether such an exemption applies at that time to that transaction.
  - (2) **Disclosures for excepted transactions—** In the case of a [residential mortgage transaction](/usc/12/4901.md?p=15) described in [section 4902(g)(1) of this title](/usc/12/4902.md?p=g-1), at the time at which the transaction is consummated, the [mortgagee](/usc/12/4901.md?p=10) shall provide written notice to the [mortgagor](/usc/12/4901.md?p=11) that in no case may [private mortgage insurance](/usc/12/4901.md?p=13) be required beyond the date that is the [midpoint of the amortization period](/usc/12/4901.md?p=7) of the loan, if the [mortgagor](/usc/12/4901.md?p=11) is current on payments required by the terms of the [residential mortgage](/usc/12/4901.md?p=14).
  - (3) **Annual disclosures—** If [private mortgage insurance](/usc/12/4901.md?p=13) is required in connection with a [residential mortgage transaction](/usc/12/4901.md?p=15), the [servicer](/usc/12/4901.md?p=16) shall disclose to the [mortgagor](/usc/12/4901.md?p=11) in each such transaction in an annual written statement—
    - (A) the rights of the [mortgagor](/usc/12/4901.md?p=11) under this chapter to cancellation or termination of the [private mortgage insurance](/usc/12/4901.md?p=13) requirement; and
    - (B) an address and telephone number that the [mortgagor](/usc/12/4901.md?p=11) may use to contact the [servicer](/usc/12/4901.md?p=16) to determine whether the [mortgagor](/usc/12/4901.md?p=11) may cancel the [private mortgage insurance](/usc/12/4901.md?p=13).
  - (4) **Applicability—** [Paragraphs (1) through (3)](#a-1..a-3) shall apply with respect to each [residential mortgage transaction](/usc/12/4901.md?p=15) consummated on or after the date that is 1 year after July 29, 1998.
- (b) **Disclosures for existing mortgages—** If [private mortgage insurance](/usc/12/4901.md?p=13) was required in connection with a [residential mortgage](/usc/12/4901.md?p=14) entered into at any time before the effective date of this chapter, the [servicer](/usc/12/4901.md?p=16) shall disclose to the [mortgagor](/usc/12/4901.md?p=11) in each such transaction in an annual written statement—
  - (1) that the [private mortgage insurance](/usc/12/4901.md?p=13) may, under certain circumstances, be canceled by the [mortgagor](/usc/12/4901.md?p=11) (with the consent of the [mortgagee](/usc/12/4901.md?p=10) or in accordance with applicable [State](/usc/12/1707.md?p=d) law); and
  - (2) an address and telephone number that the [mortgagor](/usc/12/4901.md?p=11) may use to contact the [servicer](/usc/12/4901.md?p=16) to determine whether the [mortgagor](/usc/12/4901.md?p=11) may cancel the [private mortgage insurance](/usc/12/4901.md?p=13).
- (c) **Inclusion in other annual notices—** The information and disclosures required under [subsection (b)](#b) and [subsection (a)(3)](#a-3) may be provided on the annual disclosure relating to the escrow account made as required under the [Real Estate](/usc/12/1715z–20.md?p=b-2) Settlement Procedures Act of 1974 [[12 U.S.C. 2601](/usc/12/2601.md) et seq.], or as part of the annual disclosure of interest payments made pursuant to Internal Revenue Service regulations, and on a form promulgated by the Internal Revenue Service for that purpose.
- (d) **Standardized forms—** The [mortgagee](/usc/12/4901.md?p=10) or [servicer](/usc/12/4901.md?p=16) may use standardized forms for the provision of disclosures required under this section, which disclosures shall relate to the [mortgagor](/usc/12/4901.md?p=11)’s rights under this chapter.

# §4904. Notification upon cancellation or termination

- (a) **In general—** Not later than 30 days after the date of cancellation or termination of a [private mortgage insurance](/usc/12/4901.md?p=13) requirement in accordance with this chapter, the [servicer](/usc/12/4901.md?p=16) shall notify the [mortgagor](/usc/12/4901.md?p=11) in writing—
  - (1) that the [private mortgage insurance](/usc/12/4901.md?p=13) has terminated and that the [mortgagor](/usc/12/4901.md?p=11) no longer has [private mortgage insurance](/usc/12/4901.md?p=13); and
  - (2) that no further premiums, payments, or other fees shall be due or payable by the [mortgagor](/usc/12/4901.md?p=11) in connection with the [private mortgage insurance](/usc/12/4901.md?p=13).
- (b) **Notice of grounds—**
  - (1) **In general—** If a [servicer](/usc/12/4901.md?p=16) determines that a [mortgage](/usc/12/1707.md?p=a) did not meet the requirements for termination or cancellation of [private mortgage insurance](/usc/12/4901.md?p=13) under subsection (a) or (b) of [section 4902 of this title](/usc/12/4902.md), the [servicer](/usc/12/4901.md?p=16) shall provide written notice to the [mortgagor](/usc/12/4901.md?p=11) of the grounds relied on to make the determination ([including](/usc/12/25b.md?p=a-3) the results of any appraisal used to make the determination).
  - (2) **Timing—** Notice required by [paragraph (1)](#b-1) shall be provided—
    - (A) with respect to cancellation of [private mortgage insurance](/usc/12/4901.md?p=13) under [section 4902(a) of this title](/usc/12/4902.md?p=a), not later than 30 days after the later of—
      - (i) the date on which a request is received under [section 4902(a)(1) of this title](/usc/12/4902.md?p=a-1); or
      - (ii) the date on which the [mortgagor](/usc/12/4901.md?p=11) satisfies any evidence and certification requirements under [section 4902(a)(3)](/usc/12/4902.md?p=a-3)[^1] of this title; and
    - (B) with respect to termination of [private mortgage insurance](/usc/12/4901.md?p=13) under [section 4902(b) of this title](/usc/12/4902.md?p=b), not later than 30 days after the scheduled [termination date](/usc/12/4901.md?p=18).