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Appropriate collection of PMI payments in escrow accounts to ensure consumer protection

The Client

A Residential Mortgage Service

Challenge

  • Borrowers’ request for PMI cancellation being declined even if they had 80% LTV threshold as mandated by the Homeowners Protection Act. Different reasons cited for denial
  • Providing incorrect/ inaccurate reason for denial misleads the consumer and prevents the consumer from taking corrective action to cancel the PMI in a timely manner 

Solution and Execution

  • The Copasys® solution:
    • Pre-defines the scheduled PMI cancellation date when the LTV of the property reaches 80% of the original loan value or calculates the eligible LTV to cancel the borrower-initiated PMI
    • Highlights all accounts that have scheduled PMI cancellation dates or borrower-initiated PMI requests which are not eligible for PMI cancellation

Value Delivered

  • Audit results is published as ‘Compliant’ when accurate denial reasons are cited and ‘Noncompliant’ when inaccurate denial reasons are cited on the denial letter sent to the consumers
  • Initiating certain PMI related escrow testing rules via Copasys coupled with remediation helps:
  • Significantly reduce the consumers risk of overpaying funds due to the inappropriate collection of PMI payments
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