My question involves a mortgage in the state of: California.
I purchased my property for a contract price of $305K with 5% down less than 2 years ago. About a year later I received a letter from my lender stating I could have PMI removed if my loan to value (LTV) ratio was at least 80%. In the letter I was told that the LTV could be based off either the original purchase price or an appraisal value (as per California law). I had an appraisal done on the property by a certified appraiser. The appraisal value came out to $358K. My loan amount on April 3rd, 2014 was $284K. To calculate the LTV I divided the loan amount by the appraisal value, $284K/$358K, which gave me an LTV 79.3%. This value is less than 80% LTV. This meant I qualified for PMI removal.
After sending in the PMI removal paperwork the lender refused to remove PMI. They state the correct LTV is actually 75%. I then received another letter from them stating the 80% LTV, as if from another department at the lender. They gave me the run around for several months. Finally I decided to sue them in small claims court. Once I filed the paperwork their lawyer contacted me and tried to settle for $500. I told him no. He then stated he needed more time to review the paperwork and see if I indeed qualified for PMI removal. He delayed the court date. He then tried to settle for $1000. I again told him no. Now he's trying to settle for $3000. I keep telling him just to remove PMI. I don't understand why they just don't remove it instead of trying to settle. Oh, one thing I forgot to mention, they want me to dismiss all claims related to my loan and sign a Settlement and Release agreement which I'm assuming will state I can never sue them again for the removal of PMI.
Here's my question:
My small claims suit is for two months worth of PMI ($280). If I win the suit is the judge only going to award me the $280? Or will the judge also take into consideration the additional months of PMI I've been paying (about 5 now) since I filed the suit? Also, does the judge have the power to tell the lender to remove PMI? If they don't, what court of law do I need to go to to get PMI removed?
As a side note, real estate prices have recently gone up quite a bit where I live and a comparable property just sold for $499K so I definitely now meet even their more strict 75% LTV but I don't want to pay for another appraisal just yet (unless of course it would help to show it to the judge).
Any help would be appreciated.
- One very frustrated homeowner.
I purchased my property for a contract price of $305K with 5% down less than 2 years ago. About a year later I received a letter from my lender stating I could have PMI removed if my loan to value (LTV) ratio was at least 80%. In the letter I was told that the LTV could be based off either the original purchase price or an appraisal value (as per California law). I had an appraisal done on the property by a certified appraiser. The appraisal value came out to $358K. My loan amount on April 3rd, 2014 was $284K. To calculate the LTV I divided the loan amount by the appraisal value, $284K/$358K, which gave me an LTV 79.3%. This value is less than 80% LTV. This meant I qualified for PMI removal.
After sending in the PMI removal paperwork the lender refused to remove PMI. They state the correct LTV is actually 75%. I then received another letter from them stating the 80% LTV, as if from another department at the lender. They gave me the run around for several months. Finally I decided to sue them in small claims court. Once I filed the paperwork their lawyer contacted me and tried to settle for $500. I told him no. He then stated he needed more time to review the paperwork and see if I indeed qualified for PMI removal. He delayed the court date. He then tried to settle for $1000. I again told him no. Now he's trying to settle for $3000. I keep telling him just to remove PMI. I don't understand why they just don't remove it instead of trying to settle. Oh, one thing I forgot to mention, they want me to dismiss all claims related to my loan and sign a Settlement and Release agreement which I'm assuming will state I can never sue them again for the removal of PMI.
Here's my question:
My small claims suit is for two months worth of PMI ($280). If I win the suit is the judge only going to award me the $280? Or will the judge also take into consideration the additional months of PMI I've been paying (about 5 now) since I filed the suit? Also, does the judge have the power to tell the lender to remove PMI? If they don't, what court of law do I need to go to to get PMI removed?
As a side note, real estate prices have recently gone up quite a bit where I live and a comparable property just sold for $499K so I definitely now meet even their more strict 75% LTV but I don't want to pay for another appraisal just yet (unless of course it would help to show it to the judge).
Any help would be appreciated.
- One very frustrated homeowner.
Mortgages: Sueing Mortgage Lender for Failure to Remove Pmi - They Want to Settle
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