Seven years after the enactment of the law providing consumers the right to cancel their private mortgage insurance, the number of consumers canceling their insurance has doubled, according to eAppraiseIT.

With the doubling of cancellation, there’s also been a growing trend of mortgage servicers outsourcing parts of the mortgage insurance cancellation process, eAppraiseIT said.

To date this year, eAppraiseIT, on behalf of servicers, said it has processed more than 10,000 requests from consumers to cancel their mortgage insurance. EAppraiseIT is a provider of real estate valuation services.

“EAppraiseIT has been providing PMI release services to mortgage servicers on an outsourced basis since 2002, but we have noticed a 110 percent increase in usage this year,” said Diane Valadez, senior vice president of valuation consulting.

Servicers automatically route PMI cancellation requests from borrowers to eAppraiseIT’s private-label call center. EAppraiseIT then counsels the borrower to help them determine if their loan is eligible for PMI cancellation, advises the borrower of the valuation fee and timing, orders the appropriate valuation and reports the results back to the servicer, which makes the ultimate cancellation decision.

The company offers automated valuation models, or AVMs, for borrowers who inquire about PMI cancellation so they can better judge whether to go forward with the process.

The Homeowners Protection Act, which specifies the requirements for borrowers to cancel their PMI, was signed into law on July 29, 1998, with an effective date of one year later. Generally, borrowers may cancel their PMI after two years if they have made their payments on time and the equity in their home has grown to more than 20 percent. An appraisal or other acceptable form of valuation is needed for the cancellation request to be fulfilled by the mortgage servicer.

Mortgage insurance is automatically canceled when a loan amortizes to 78 percent of the original value, but as a practical matter few mortgages stay on the books for that long.

EAppraiseIT is a joint venture between The First American Corp. and LandAmerica Financial Group, and is managed and majority owned by First American.


Send tips or a Letter to the Editor to or call (510) 658-9252, ext. 133.

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