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tsevier
79 Posts |
 Posted - 11/05/2009 : 07:27:15 AM
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| My understanding is that monthly mortgage insurance payments are included in the calculation of APR. I recently ran into a MDIA compliance issue with a lender who includes a full 30 years of FHA MI payments in their APR calculation, our system is setup to auto-cancel the APR at 78% of original loan amount. This leads to a large difference in APR. Is there any official calculation method on this that we can cite that anyone is aware of? |
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nowbroker
3075 Posts |
Posted - 11/05/2009 : 08:26:58 AM
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| Have you talked to this lender? MI for life is the old method before the law came into effect that requires a lender to cancel it when the LTV reaches 78% LTV based on scheduled payments with a 5 yr min. They are the ones that are incorrect. |
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tsevier
79 Posts |
Posted - 11/05/2009 : 08:31:25 AM
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| I believe they are incorrect as well, but I have not been able to find anything official to reference. I was hoping someone might be able to reference an official guideline on this? |
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tsevier
79 Posts |
Posted - 11/09/2009 : 08:16:45 AM
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| Any idea here on how many months of MI should be factored into the APR calculation for an FHA 30 year fixed loan? Seems like there should be an official statement somewhere, but I cannot find it. |
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LanceB
204 Posts |
Posted - 11/09/2009 : 10:18:52 AM
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| I went through all of my closed files to try to make sure our company didn't run into APR problems when the new reg Z passed. Most of the FHA loans I looked at the final TIL showed cancellation at 120 months, so that is what I have been doing to avoid APR problems. It doesn't sound right, but I can't make my lenders change what they are putting you know? |
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tsevier
79 Posts |
Posted - 11/09/2009 : 10:25:28 AM
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| Lance, thanks for the info. 120 months is at least a reasonable standard. 360 makes no sense to me. |
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