# PMI Renewals, PMI Prepaids and PMI Escrow

The PMI Applies option is the access point to the Private Mortgage Insurance accordion where you can set up mortgage insurance payments for a loan transaction.

Private Mortgage Insurance is available only in transactions in which the chosen repayment method is Installment or Amortized Balloon/Balloon.

Select Homeowners Protection Act of 1998 (HOPA) if the loan is subject to that act. HOPA applies to all residential mortgage loans except government-owned loans, such as federal HUD, FHA, the VA, or state MHFA programs; and except second mortgages.

ComplianceOne® mortgage offers the PMI coverage types of Level Balance or Declining Balance.

- Level Balance: The PMI payment amount is based on the original amount of the loan and remains the same throughout the loan repayment period.
- Declining Balance: The PMI payment amount is based on the outstanding balance. As the borrower pays down the loan, the PMI payment amount will decrease accordingly.

The PMI types of Renewals Only and Renewals with Prepaid are supported by ComplianceOne® mortgage. By selecting the option of Renewals Only, you have the ability to complete the data needed for the number of years and rate for up to three tiers of the PMI table. Selecting Renewals with Prepaid will allow you, in addition to defining the number of years and rates for the PMI rate type, to enter a number of PMI payments to be prepaid for the transaction.

When prepaid PMI is associated with the loan, the prepaid PMI total is based on the number of payments entered and the rate in the first row of the PMI table. Upon clicking Calculate, a Mortgage Insurance fee will be automatically generated for you and will be visible in the Fees table above the PMI section and will reflect the Collect As and POC settings made in the Prepaid PMI area. If a change to the PMI prepaid amount is required, you must update the information in the PMI area.

Escrowed PMI is incorporated into the transaction with both PMI type selections. The payment frequency in the Escrow PMI section reflects whether the mortgage insurance premium is payable to the PMI provider on an annual or monthly basis.

Also, you must indicate whether you prefer the PMI renewal payments that are held in escrow to be applied to the payment stream through the final termination point or will be refunded separately to the borrower. If the escrowed PMI is refunded separately, the term of the cutoff will not be credited by the number of months escrowed.

When you select that the mortgage insurance premium is payable to the agency on an annual basis, payment date for the mortgage insurance escrow item in the escrow disbursement table will reflect a date that is one year from the Funding date of the transaction. When the timing of the disbursement requires that reserves be deposited with lender at closing to cover the upcoming item, ComplianceOne® mortgage will automatically calculate the number of payments, payment and total amount and create an item within the Reserves Deposited with Lender table. In addition, an individual fee will be created for that PMI Escrow item in the Fees table which will reflect the total of that fee and other applicable information. As with the PMI prepaid fee noted above, if a change to the PMI escrow amount is required, you must update the information in the PMI or Escrow area as the details of the fee will be read-only.

If changes are made to the PMI prepaid or PMI escrow areas, you will see the updated values after clicking the Calculate button.

Parent topic: Calculations Page Parent topic: Calculations Page