Consumer complaint received 2023-07-06
Company: NEW YORK COMMUNITY BANCORP INC
State: MN
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
On XX/XX/XXXX I made an additional {$1500.00} payment to my mortgage which brought my balance to {$570000.00}. This brought the principal LTV to under 80 %. 
The original purchase price of the home was {$720000.00} on XX/XX/XXXX. 

I filed a petition to have my PMI removed on XX/XX/XXXX in writing. 

In a letter dated XX/XX/XXXX I was informed that that request was denied. 

In Flagstar 's correspondence dated XX/XX/XXXX, the company indicate that records show that XXXX XXXX XXXX XXXX is an investment property and as such requires a 65 % LTV in order to remove the PMI. This is indeed my primary residence from which I have been filing taxes for the past two years. However this is also a duplex where tenants also live in the same building. While I now understand that the loan investors have different guidance for this type of property, this was never disclosed at any point during the mortgage process. 

In fact, several clauses from the original legal mortgage documentation directly state that I am entitled to request cancellation at 80 % or my PMI will automatically terminate at 78 % LTV provided my loan is in good standing. 

Please allow me to draw your attention to the following clauses of the PMI Disclosure Form that I signed on XX/XX/XXXX. 

" Federal law gives you the right to cancel PMI or requires that PMI automatically terminate. 
You have the right to request that PMI be canceled at your option on either of the following dates : The date the principal balance of your loan is first scheduled to reach 80 % of the original value of the property based solely on the initial amortization schedule for your loan and irrespective of the outstanding balance of the loan on that date. This date is XX/XX/XXXX. 
The date the value of the loan actually reaches 80 % of the original value of the property. ( 80 % LTV based on original price reached XX/XX/XXXX ) PMI will be canceled on the termination date only if you have satisfied all of the following conditions : You submit a written request for PMI cancellation ( Completed in XXXX ) You have a good payment history ( Flagstar requires 12 months of no missing payments ) You are current on your loan payments ( Requirement satisfied ) The servicer receives satisfactory evidence that the propertys value has not declined below its original value ( See below ) If you are current on your loan payments PMI will automatically terminate on the date the principal balance of your loan is first scheduled to reach 78 % of the original value of the property, based solely on the initial amortization schedule. 


The cancellation and automatic termination requirements described do not apply to certain loans that may present a higher risk of default. Your loan, however, does not fall in to this category. Accordingly the cancellation and automatic termination provisions described above apply to your loan. '' Flagstar 's response letter dated XX/XX/XXXX states that they will reconsider the request to cancel PMI if a new appraisal is obtained. As I have satisfied all of the other requirements, I would be happy to proceed with that, provided Flagstar amend the requirement such that the appraisal need only show an 80 % LTV. 


Thank you for your continued patience. Everyone I have spoken with at Flagstar has been lovely to work with so far.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation